China’s economy grew by 7.9% in the second quarter

China’s GDP growth in the second quarter of 2021 was lower than expected, while retail sales and industrial production increased faster than forecast.

Automobile assembly line in Dongfeng Honda factory, Wuhan city, China. Photo: AFP

China’s gross domestic product (GDP) in the second quarter of 2021 increased by 7.9% year on year, the National Bureau of Statistics of China announced this morning of July 15. However, the second quarter growth was lower than the 8.1% growth estimate given by Reuters previously.

Compared to the first quarter of 2021, China’s GDP in the second quarter increased by only 1.3%. Prior to that, China’s first-quarter GDP grew by 18.3% year-on-year.

“China’s economy maintains a steady recovery,” China’s National Bureau of Statistics said in a statement on the same day. However, the agency added that concerns remained about the global spread of the pandemic and the “unbalanced” recovery in the country.

Retail sales in China in June increased 12.1% year-on-year, higher than the 11% forecast given by Reuters. China’s retail sales growth still lags behind growth in the overall economy and was below analyst expectations in the first two months of the second quarter.

Meanwhile, China’s industrial production recorded an increase of 8.3%, higher than the previous estimate of 7.8%. According to the announcement of China’s customs authority, the country’s exports in June increased more than expected to 32.2%.

In the past quarter, Chinese officials have also announced support for companies affected by the spike in commodity prices.

Late last week, the People’s Bank of China (PBoC) announced that it would cut the reserve requirement ratio (RRR) by 50 basis points for all banks. This decision will take effect from 7/15.

The move of thái Central Bank of China is expected to “free up” about 1 trillion yuan ($154 billion) of long-term liquidity for the world’s second-largest economy.

However, experts from the multinational investment bank UBS assessed that the reduction of the reserve requirement ratio to some extent has added to the concerns of securities investors that the recovery The economy in the second and third quarters of 2021 may not be as good as the market expected.

Survey results in urban China show unemployment rate in this area in June was stable at 5%, while the unemployment rate of young people, aged 16-24, increased to 15.4%.