China Resists Recession, Its Economy Grows 3.2 Percent In The Second Quarter Of 2020

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JAKARTA - China rejects a recession. The South China Morning Post said that China's economy in the second quarter of 2020 was able to grow 3.2 percent.

The softest growth shows that China's economy is recovering from the impact of the damage caused by the COVID-19 pandemic. Previously, the country with the second largest economy in the world was minus 6.8 percent in the first quarter of 2020.

The contraction was the first since the end of the Cultural Revolution in 1976. As for growth in the second quarter of 2020, it was above analyst forecasts for 2.4 percent growth.

While Reuters reported, this growth was also higher than analyst estimates in a Reuters poll predicting 2.5 percent. China's economy has recovered slowly in the past two months, although the rebound from the downturn caused by the pandemic has been uneven.

The government has unveiled a series of measures, including more fiscal spending, tax breaks and cuts in lending rates and bank reserve requirements to revive the coronavirus-ravaged economy and support jobs.

However, China's GDP still fell by 1.6 percent in the first semester of 2020 compared to the same period last year. After shutting down its economic activities in the first quarter, China claimed earlier efforts among other countries in dealing with COVID-19.

However, the conservative stimulus approach resulted in only a moderate domestic recovery. China's economy is still very vulnerable to falling external demand due to the impact of the shutdown on global activities.

"The recovery in the second quarter was strong, but also very uneven given the recovery in supply was stronger than demand and investment was stronger than consumption," said Larry Hu, chief China economist at Macquarie Bank Ltd., as quoted by Bloomberg.

In the future, said Larry, although the growth momentum will run slowly, China's GDP growth could rebound to around 5 percent in the second half of 2020.