China’s economy is growing more slowly. China’s statistics agency released its latest growth figures today, which fell short of analysts’ expectations.
The recovery of the Chinese economy since the end of the strict zero-Covid policy at the end of last year is not making much progress. According to statistics authorities, gross domestic product rose by 6.3 percent in the second quarter compared to the same quarter last year.
Shanghai lockdown is having an impact
At first glance, that seems like a lot, but economic output was very low in the comparable quarter of 2022 – due to the tough lockdown in Shanghai. The country’s most important economic metropolis was sealed off for two months, people were not allowed to leave their homes, and many companies went out of business.
Therefore, a look at the previous quarter offers a more realistic picture this year: Compared to the months of January to March, economic output grew by only 0.8 percent from April to June.
There is a crisis in many sectors
It is becoming increasingly obvious that China’s economy is in crisis. Youth unemployment has reached a new record high. In June, 21.3 percent of people between the ages of 16 and 24 were officially unemployed.
Figures from last week show that foreign trade fell sharply in June. In addition, the heavily indebted Chinese construction industry is in crisis, which has guaranteed stable growth rates for decades. Local governments are running out of money.
Come in economic stimulus plan?
In spring, the communist state and party leadership set an economic growth target of five percent for 2023. Statistics Bureau spokesman Fu Linghui said today the goal could still be achieved. However, observers believe that this is only possible if the communist leadership invests massive amounts of money in an economic stimulus package.