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China’s Economy Shrinks on Lingering Covid Woes

China’s Economy Shrinks on Lingering Covid Woes
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By Staff, Agencies

China's economy slowed in the second quarter of 2021, recording its worst quarterly performance since the start of 2020, when it was brought to a near standstill amid the first outbreak of the Covid-19 pandemic.

According to data released by China’s National Bureau of Statistics [NBS] on Friday, the country’s GDP grew by a mere 0.4% in the three months to June 30, compared with the same period last year. On a quarterly basis, GDP shrank 2.6%.

For the first half of the year, the economy grew by 2.5%, much less than Beijing’s 5.5% target for 2022. The government admitted on Friday that reaching the GDP goal would be difficult in the coming months.

“There are challenges to achieve our expected economic growth target for the whole year,” Fu Linghui, a spokesperson for the NBS, said at a press briefing. He noted that apart from the pandemic troubles at home, higher global commodity prices and growing stagflation risks around the world also affect China's economy.

The drop in GDP comes amid China’s tough zero-COVID policy due to new outbreaks of the virus across the country.

Since March, Beijing has imposed lockdowns in dozens of cities, including financial hub Shanghai. The measures slashed consumer activity and disrupted supply chains, leading to closures of most shops, restaurants and factories.

Authorities however started gradually reopening the economy at the beginning of June, with restrictions in several major cities now lifted.

As lockdown measures ease, Fu Linghui said authorities expect the economy to rebound in the second half of 2022.