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China's economy rebounded substantially in the second quarter with
stronger-than-expected GDP growth of 3.2 percent from a year earlier,
and economists said that such recovery momentum is likely to be
sustained in the coming quarters as policies are expected to remain
supportive and flexible. The country has become the world's first major economy that has shown
robust recovery from the damage caused by the COVID-19 pandemic as the
economy returned to growth from a sharp contraction of 6.8 percent in
the first quarter. Key economic indicators have shown continuous improvement. The
country's industrial production is recovering quickly and grew by 4.4
percent year-on-year in the second quarter, contrasting with an 8.4
percent decline in the first quarter, according to data released by the
National Bureau of Statistics on Thursday. The service sector expanded by 1.9 percent in the second quarter,
reversing the decline of 5.2 percent in the first three months. Both
investment and consumption are rebounding as the decline in fixed-asset
investment narrowed to 3.1 percent in the first half of the year while
the contraction of retail sales narrowed to 3.9 percent in the second
quarter from the steep decline of 19 percent in the previous quarter,
according to the NBS. "Generally speaking, the economy overcame the adverse impact of the
COVID-19 pandemic gradually in the first half of the year and
demonstrated a momentum of restorative growth with greater resilience
and vitality," Liu Aihua, an NBS spokeswoman, said at a news conference
in Beijing. Economists said that China's strong economic rebound was helped by
factors including the country's effective measures to bring the pandemic
under control, strong policy support for business resumption and
investment, and better-than-expected export recovery as a result of the
country's fast production resumption. "While the global pandemic situation continues to deteriorate,
China's economy has managed to recover quickly with GDP growth
rebounding to above 2 percent, which is a remarkable achievement," said
Lu Ting, chief China economist at Nomura Securities. Lu said that China's fast production resumption has helped the
country's export recovery and stabilized employment. In addition, timely
and effective policies to spur infrastructure investment have also
helped to drive up domestic demand. Economists at US bank Goldman Sachs said in a research note that
China's economic performance in the second quarter was well above market
expectations thanks to much less drag on the economy from the virus and
the government's strong and supportive policy stance. More policies to boost consumption and domestic demand are expected
as the country's recovery has shown some uneven signs with supply
recovering faster than demand while investment appears to be rebounding
more strongly than consumption, economists said. Despite the recent steady recovery, the country's retail sales growth
remains in negative territory, declining 1.8 percent year-on-year in
June as the COVID-19 pandemic continues to restrain consumer spending in
catering and other sectors that require physical contact.
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