Economic upswing in China, where the GDP jumped from 3.2% in the second quarter

China is The first country to have raised its activity and appears as a barometer for the anticipated recovery and growth of the global economy.

A boost to chinese growth. The GDP jumped from 3.2% in the second quarter, after having registered its worst result in history in the beginning of the year, at the time where the epidemic of Covid-19 paralyzed the country.

Although controversial, the official figure of the chinese GDP, announced on Thursday by the national Bureau of statistics (cbs), is always scrutinized due to the weight of the country in the global economy. His rise from April to June is more pronounced than the forecasts of a group of analysts (+1.3 per cent).

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China, where the virus appeared in December, before spreading into the rest of the world, is the first country to have raised its activity and appears as a barometer for the anticipated recovery and growth of the global economy. The pace of quarterly growth, however, remains far from the level reached on the set of 2019 (+6,1%), which was already at a historic low. But it is much better than in the first quarter (-6,8%), when the epidemic of Covid-19 paralyzed the country.

The chinese Exchanges, however, were in the red at mid-day, Shanghai transferor was 1.41% and Hong Kong 1,17%. "The market believes that it will probably not" to the GDP figures for the second quarter, says the economist Iris Pang, of ING bank, who also judged the official statistics of "too good to be true". On the whole of the first half, the chinese economy is facing serious challenges posed by the Covid-19" both in the country and abroad, admitted to the press a spokesperson for the SNB, Liu Aihua, holding the activity always under "pressure".

The employment pressure

retail sales, a main indicator of consumption, have as well yet known in June, a decline year on year (-1,8%). This decrease is lower than that of the previous month (-2,8%) but the figure is worse than forecasts of analysts, who had forecast on average +0.5 per cent.

On the other hand, the manufacturing production was completed last month, its best performance since the beginning of the year, with an increase of 4.8% year on year. But the export sector, a pillar of the chinese economy, remains particularly vulnerable at a time when the main trade partners of Beijing still face the virus. As for investment in fixed capital, it appears on the first six months of the year in contraction of 3.1%.

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The rebound of the economy is due to the "success [of the country] in the management of the virus," and to a policy of government support, believes the ratings agency Fitch. Despite the emergence of a new home in Beijing last month, only one new case of contamination has been recorded Thursday throughout the country. And to support a fragile economy, the country will be left spinning its deficit this year to 3.6% of GDP (compared to 2.8% last year).

Several provinces or municipalities have launched commercial operations at shots of vouchers or discounts to encourage consumption and, ultimately, support jobs. Because if China is recovering gradually from the epidemic, it is at the price of enormous economic implications : millions of people have lost their jobs, a factor which weighs heavily on domestic consumption. In June, the unemployment rate stood at 5.7%, against 5.9% in may and a record 6.2% in February.

Poverty and floods

This figure does not reflect, however, that the situation of urban residents and excludes de facto the hundreds of millions of migrant workers from the countryside and which are also the most weakened by the crisis. To make ends meet, the most vulnerable left with no choice other than to improvise street vendors despite the vindictiveness of the police.

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According to the chinese Prime minister Li Keqiang, 600 million people, or nearly half of the population, earn less than 1000 yuan per month (124 euros).

in this context in addition to the rainfall records that fall around the basin of the Yangtze river, where lives nearly one-third of the chinese population. "The economic damage caused by the floods are likely to be high, while thousands of buildings were destroyed," warns Fitch.

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This context is of a nature to threaten the sacrosanct "social stability", jeopardizes the ambitious promise of the president Xi Jinping to eradicate extreme poverty by 2020. Last month, the international monetary Fund (IMF) has revised downward its growth estimate for China this year to 1%.

Date Of Update: 18 July 2020, 16:58