China Becomes First Major Economy to Grow Since Covid-19 Pandemic
China became the first major economy to grow since the coronavirus pandemic began, recording an unexpectedly strong 3.2% expansion in the latest quarter as anti-virus lockdowns were lifted and factories and stores reopened.
The growth reported Thursday was a dramatic improvement over the previous quarter’s 6.8% contraction – China’s worst performance since at least the mid-1960s.
But it was the weakest positive figure since China started reporting quarterly growth in the early 1990s.
The coronavirus pandemic began in China in December. It was the first economy to shut down and the first to start the drawn-out process of recovery in March after the ruling Communist Party declared the disease under control.
The government has promised more support for job creation and is pumping money into the economy through higher spending and bank lending.
But Beijing has avoided joining the United States and Japan in rolling out stimulus packages of US$1 trillion or more due to concern about adding to already high Chinese debt.
Manufacturing and some other industries are almost back to normal operating levels. But consumers wary of losing their jobs have curbed their spending. Cinemas and some other businesses still are closed and restrictions on travel stay in place.
In the three months ending in June, factory output rose 4.4%, a sharp rebound from the previous quarter’s 8.4% contraction as factories that make the world’s smartphones, shoes, toys and other goods reopened.
Retail sales shrank by 3.9%, but that was much better than the previous quarter’s 19% contraction while millions of families were confined to their homes and shopping malls were shut down.
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