China’s economy grew this spring at its slowest pace since the start of the coronavirus pandemic, sharply alleviating the impact of a Covid-19 policy that continues to lead to widespread lockdowns and mass quarantines, bringing some business to a standstill.
The economy grew by 0.4 percent in the second quarter compared to a year earlier, the National Bureau of Statistics reported Friday. That was the slowest growth rate since the first three months of 2020, when China effectively closed its doors to fight the coronavirus. The economy is contracting for the first time in 28 years.
That recession in 2020 was short-lived.
As the world faced the devastating effects of the pandemic, China’s economy recovered almost immediately, aided by virus restrictions that minimized infections and deaths. However, the current outlook is not so promising. Even historically reliable indicators, such as ownership and production, have become much less reliable.
The most recent economic slump struck in April and May, when Shanghai, China’s largest city, went into lockdown for nearly two months and the impact rippled through the economy. Office buildings were closed and workers had to stay at home. Hundreds of millions of consumers were locked up across China, leaving shops, restaurants and service providers without customers.
Delays at the port of Shanghai, one of the busiest in the world, brought an already congested supply chain to a halt. The few factories that managed to stay open did so by allowing workers to live and sleep on site to prevent further spread of the virus.
Retail sales, an indicator of how much consumers spend, fell 4.6 percent in the three months to June from a year earlier, the government said.
This is a story in development. Come back for updates.
