Amid rising commodity prices and supply chain disruptions, the economy in China saw a slowdown from April through June from its accelerated pace between January and March of this year, according to a government press release on Thursday (July 15).
“China’s economy sustained a steady recovery with the production and demand picking up, employment and prices remaining stable, new driving forces thriving fast, quality and efficiency-enhancing, market expectations improving and major macro indicators staying within a reasonable range,” according to the release from the country’s National Bureau of Statistics.
China reported 7.9 percent growth this quarter over last year, but missed forecasts. The economy is considerably contracted from the 18.3 percent growth seen earlier this year following the COVID-19 pandemic. Analysts predicted that China’s economy would grow 8.1 percent in the second quarter, according to a Reuters poll that CNN reported on.
Preliminary estimates show that China’s gross domestic product (GDP) increased 12.7 percent year on year for the first six months of 2021, but was 5.6 percent lower than the first quarter of this year.
“We are facing a complicated domestic and international environment, especially a rise in commodity prices, which has put significant cost pressure on business,” Liu Aihua, an NBS spokeswoman, said at a press conference in Beijing, CNN reported.
Industrial output was up 8.3 percent in June from 2020, edged down from May’s 8.8 percent growth. Auto manufacturing declined over 4 percent in June compared to the same time in 2020. Liu attributed this to the chip shortage.
With many countries relying on China for both its factories and consumers, its slowing economy could trigger a slowdown in the global economy, The New York Times reported.
China’s blow to Didi, which forced the removal of its apps from WeChat and Alipay, has also affected the global markets. The move happened just days after Didi went public in the U.S. “If Didi is removed from sizable and scalable avenues of visibility and accessibility, it follows that growth opportunities are rendered less certain, not just for Wall Street but for the development and adoption of the super app,” PYMNTS reported last week.
Overall, G-20 nations reported an increase in GDP in the first quarter of this year compared to the same period last year.
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