Due to floods caused by climate change, and the new outbreak of coronavirus in China, the economy recovery slowed down and is slower than expected. GDP growth forecast for 6.8 percent in the third quarter may not come true, Bloomberg believes.
slowed down the growth of production and retail sales. According to the National Bureau of Statistics (NBS), which leads Reuters, in July, production increased by 6.4 percent year in annual terms, retail sales – by 8.5 percent, which did not meet the expectations of analysts.
China struggles with the strongest outbreak of coronavirus since the first cases of the disease in 2020. The resumption of measures to combat coronavirus limits consumption growth and slows down exports. Also because of flooding and environmental ambitions, the Chinese industry faced serious shocks.
Industrial production in the second largest economy of the world increased by 6.4 percent year in July, according to NBS. Analysts expected production volume will grow by 7.8 percent after 8.3 percent growth in June. Retail sales rose in July by 8.5 percent, which is much lower than 11.5 percent growth.
Due to the deterioration in demand at the end of July and growing concerns about employment it is expected that the decline in the growth rate of China will be stronger than 2021. GDP growth forecast by 6.8 percent in the third quarter, according to Bloomberg, may not come true.
Investments in real estate, which are the most important factor in the restoration of China, increased by only 12.7 percent in January-July compared with 15 percent growth in the first half of 2021.
Restoration in China is uneven due to the flashes of coronavirus and flooding. The Chinese economy returned to the extrasemia growth rates. However, it slows down, since enterprises face high costs and inferior chain disorders. The flash in the port of Ningbo-Zhoushhan stopped all incoming and outgoing container transport on one terminal, limiting about 25 percent of the bandwidth of the second largest port of China for an indefinite time. These interruptions can undermine not only China’s export and economy, but also to have a domino effect in other countries.