Chinese media emphasized that the country's GDP increased by 2.5% in the first half of 2022, while western media focused on the dismal 0.4% growth in the second quarter as opposed to 4.8% growth in the first quarter to highlight the slowing down of the Chinese economy.
The expansion of the world's second-largest economy is fueled by a quick recovery in economic activities after Covid-19 outbreaks in major cities were effectively reined in under the country's dynamic zero-Covid strategy and the efficient execution of pro-growth measures, the Global Times reported, adding that “China's GDP growth offers a bright light for the global economy that is mired in a series of troubles, ranging from the pandemic to the Russia-Ukraine conflict, to looming economic crises in many countries around the world, including the U.S.”. The downward pressure on China's economy increased significantly in the second quarter due to a surge of Covid-19 in major Chinese cities, especially its economic hub Shanghai, Cong Yi, Professor at the Tianjin University of Finance and Economics, told the Global Times.
“However, the positive growth in Q2 as a result of a strong rebound in June has indicated the resilience of the Chinese economy to quickly recover from the epidemic shock,” Cong said. The value-added industrial output of major industrial enterprises rose 3.4% year-on-year in the first half of the year. It grew 0.7% year-on-year in the second quarter, on par with the growth in May. The growth quickened in June to 3.4%, 3.2 percentage points faster than in May. Retail sales dropped by 4.6% in Q2, narrowing from a slide of 6.7% in May. They grew 3.1% year-on-year in June. The rebound of consumption comes after both central and local governments introduced measures to boost consumption, especially the stimulus in the automobile sector, Cong said. China produced 2.499 million cars and sold 2.502 million units in June, up 28.2% and 23.8% year-on-year respectively. Fixed-asset investment (FAI) also grew 6.1% in the first half of the year as a result of the accelerated allocation of special-purpose bonds to drive up investment, the Global Times reports.
The South China Morning Post adds that the 0.4% growth in the second quarter was the lowest since China's economy shrank by 6.8% in the first quarter of 2020 following the Covid-outbreak in Wuhan. The International Monetary Fund (IMF) said that China needs to add more fiscal and monetary policy support to combat the economic slowdown brought on by continued coronavirus lockdowns, but less-restrictive containment policies also were needed. “We welcome the shift to a more expansionary fiscal policy this year, but even more support would help counter the ongoing growth slowdown,” IMF Spokesman Gerry Rice said at a news briefing when asked about the Fund’s policy advice for China. Given low core inflation in China, the IMF believes that the People’s Bank of China (PBOC) should continue to provide monetary policy support, Rice added.
