China’s economy grew 3.2% year-over-year in the second quarter as official data showed on Thursday, but the benchmarks in mainland China plummeted sharply on the day.
China’s gross domestic product turned positive in the second quarter with a 3.2% growth as compared to one year ago, the National Bureau of Statistics said. The GDP in the three months through June hit 24.5 trillion yuan($3.5 trillion) on the basis of data in the same period of 2019.
Analysts gave a 2.5% forecast for in the second quarter in a Reuters poll before the official data release, which underestimates China’s recovery speed. Data firm Wind, China’s answer to Bloomberg, showed as many as 19 of the 20 research institutions predict positive growth, with an average forecast of 2.9%.
China recorded a record-low contraction in the previous quarter to 20.7 trillion yuan($3 trillion), down 6.8% year-over-year, since 1992 when then quarterly GDP records began.
The second-largest economy’s GDP totaled 45.7 billion yuan($6.5 billion) in the first half-year, down 1.6% year-over-year, the official data reported.
“Since the main indicators such as GDP, industry, service, consumption, and investment were still in the falling range in the first half of the year, the rebound in the second quarter is still a recovery for the loss,” Aihua Liu, a Statistics Bureau spokeswoman, said at a news conference on Thursday.
The added value of agriculture jumped 3.9% year-over-year while the production capacity of live pigs continued to recover, according to the report.
The added value of industrial enterprises above designated size jumped 4.4% year-over-year in the April to June quarter. The leading indicator of the Purchasing Managers Index hit 50.9% in June with the expansion, as high-tech manufacturing and equipment manufacturing led the industrial sectors, up 10% year-over-year in June.
The wholesale and retail industry, accommodation, and catering industry continued to decrease by 8% and 27%, respectively in the first half-year. The total retail sales of social consumer goods haven’t picked up, reporting a year-over-year decrease of 11.4% in the first half-year.
“Under the epidemic prevention and control measures, some aggregated and contacted consumption activities are still subject to certain restrictions, so the current retail food and beverage revenue is in a recovery growth situation,” Liu added.
Other challenges China’s recovery is the country's flooding which has killed over 141 people and affected approximately 38 million residents in 27 provinces as of Monday. Starting in early June, the consecutive weeks of extreme rain have caused southern China's Yangtze River area to suffer the worst flood disaster in decades.
Liu said at the conference that the “counter-cyclical government measures” of combating the coronavirus have offered us more experience, confidence, and capability to deal with the flood disaster.
Other recent news came last Friday that China’s central bank said it’s not planning much more stimulus to cheer up the economy and expected the economy to back to normal.
Strong customs data showed Tuesday that China's goods imports returned to growth in June for the first time after the coronavirus-fueled nosedive, soaring 2.7% year-over-year. The exports continued to soar in the month by 0.5% from the previous year.
However, China’s mainland benchmark index, the Shanghai Composite fell 4.5% on Thursday after a 1.56% decline on Wednesday. The Shenzhen Composite declined 1.87% on Wednesday and continued to drop 5.37% on Thursday. Hong Kong's Hang Seng fell 2.1% on Wednesday.