The Chinese economy has experienced a sharp decline in growth, with its slowest growth rate since the 2020 outbreak of the virus. The main reason for the decline in growth is attributed to the widespread lockdowns, which brought business activity to a halt. On 15 July 2022, the Chinese National Bureau of Statistics (NBS) released the Q2 statistics which reflect a 0.4% growth rate from the same period in 2021.
Reduced GDP Growth in Q2
For the second quarter of 2022, the GDP increased by 0.4 percent year-on-year, approximating to RMB 29 trillion. Value added for primary industries experienced a rise of 4.4 % year-on-year, reaching RMB 1.8 trillion. Secondary industries experienced a growth of 0.9%, while tertiary industries declined in growth by 0.4% respectively.
Imports and Exports Experience Rapid Growth
The value of imports and exports in the first half year increased by 9.4 percent year-on-year, totaling to RMB 19 trillion. The total value of imports was up by 4.8%, while exports increased by 22%. General trade, the highest contributor to overall value of imports and exports experienced a year-on-year increase of 2.1%
Improvement in Rates of Unemployment
The total number of newly employed people in urban areas totaled to 6.54 million, with a surveyed unemployment rate of 5.8 % in the second quarter. Unemployment rates in urban areas were recorded at 6.1% in April, and consecutively declined in May and June to 5.9% and 5.5% respectively.
Purchasing Manager’s Index Indicate a Recovery of Performance Following Initial Decline
The Purchasing Manager Index (PMI) is a metric used to weigh the performance of large enterprises based on the criteria of production, new orders, supplier deliveries, and inventory levels and production. A figure of 50 demonstrates no change, while a figure higher or lower than 50 indicates relative increases or decreases in performance.
The Manufacturing Purchasing Manager’s Index which measures the performance for manufacturing output stood at 50.2 percent, representing a marginal increase in performance relative to the previous month. In terms of the Index for Production and Operation Expectation, a figure of 55.2 percent also indicates an improvement in performance for non-manufacturing industries.
Total Retail Sales Experienced a Decrease
According to the NBS the total retail sales of consumer goods saw a 0.7% decrease year-on-year. Specifically in the 2nd Quarter, the total retail sales experienced a 4.6% decrease year-on-year, which was especially felt in April where an 11.1% decrease was seen from the previous year. The decline in may had been reduced to 6.7%, while in June we saw a shift from the decline to an increase of 3.1% from the previous year.
Industrial Production Experiences Slow Growth On Average Despite Stability in Major Sectors
Total growth for industrial enterprises above the designated size in the 1st half of 2022 grew by 3.4% year-on-year. The industrial growth rate represents the overall economic gains for certain sectors of industrial enterprises with annual revenue amounting to over 20 million yuan in their core business. In the 2nd quarter specifically, the total value added of the industrial enterprises above the designated size went up by 0.7% from the previous year. April however saw a 2.9% decrease, which can mainly be attributed to the widespread lockdowns.
As per each sector, the high-tech manufacturing sector saw a growth rate of 9.6%, while the total value from mining grew by 9.5% and manufacturing increased by 2.8%. Innovative products including new-energy automobiles, industrial robots and solar cells all experienced consistent year on year growth of 111.2%, 31.8% and 19.8% respectively.
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