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China GDP growth slows in second quarter as COVID-19 reopening boom fades

China said Monday its economy had "shown good momentum of recovery" in the April to June quarter, even as growth slowed from 2.2% to 0.8%. File Photo by Stephen Shaver/UPI
China said Monday its economy had "shown good momentum of recovery" in the April to June quarter, even as growth slowed from 2.2% to 0.8%. File Photo by Stephen Shaver/UPI | License Photo

July 17 (UPI) -- China said Monday that economic growth slowed in the second quarter to 0.8% from 2.2% in the January to March period as the effects of an initial burst of growth unleashed by the reopening of the economy after COVID-19 faded.

Year-on-year, growth accelerated to 6.3%, up from 4.5% in the first quarter, led by a rise in industrial, manufacturing, services and agricultural output but a weakening property market and exports all weighed on the short-term performance of the economy, according to preliminary estimates published by the National Bureau of Statistics.

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GDP topped $4.15 trillion in the first quarter but only $4.3 trillion in the second quarter with trade falling by around 6% in June alone, led by an 8.3% fall in exports to just $280 million and imports down 2.6% to $209 million.

Investment in real estate development fell sharply in June, down 7.9% on a year-to-date basis compared with a 5.8% fall in the January to March period, as supply continued to far outweigh demand.

Unemployment among adults fell slightly from 4.3% to 4.1% but among 16-24-year-olds it surged to 21.3%, up from 19.6%, but inflation fell from an already low 1.3% in the first quarter to 0.7% raising the specter of deflation. Core inflation, which strips out the prices of volatile goods including food alcohol and tobacco, also fell.

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The bureau said the economy had "shown good momentum of recovery" thanks to a focus on promoting high-quality development, better-balanced domestic and international imperatives, coordinating COVID-19 prevention and control with economic and social development, and prioritizing stable growth, employment and prices.

"As a result, the market demand gradually recovered, production supply continued to increase, employment and price were generally stable, and residents' income grew steadily. The national economy showed a good momentum of recovery," the bureau said.

The Communist Party is aiming to grow the economy by 5% in 2023, a modest target compared with the pre-2020 era when growth routinely ran 6%-7%. The party is trying to balance the reopening of its $16 trillion economy -- the world's second-largest -- following three years of pandemic-related shutdowns and restrictions, which were lifted in December.

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