Dal quotidiano USA “THE WALL STREET JOURNAL”: China’s Economy Barely Grew in Quarter

China’s Economy Barely Grew in Quarter
Unemployment among young soars to record as recovery fades
BY JASON DOUGLAS

SINGAPORE—China’s economy barely grew in the second quarter from the first and youth unemployment increased to a record in June, evidence of a fading recovery that risks leaving the global economy underpowered this year as recession stalks the U.S. and Europe.
The sluggish pace of growth in 2023 is piling pressure on Beijing to reignite an expansion that is in danger of fizzling out as consumers hold back on spending and exports slump. A drawn-out real-estate crunch and shaky local-government finances are adding to the gloom. More than a fifth of Chinese aged 16 to 24 are out of work.
China’s economy grew by just 0.8% in the second quarter compared with the first three months of the year, China’s National Bureau of Statistics said Monday, less than half the 2.2% quarterly pace recorded in the January-to-March period. The result reflected weak retail sales, subdued private-sector investment and a reversal in exports, which propelled growth throughout the pandemic but are suffering now as major central banks ratchet up interest rates.
The struggle to keep growth motoring is the most pressing challenge among a lengthy list of issues facing Chinese leader Xi Jinping and his top officials.
A difficult relationship with the U.S.-led West is
squeezing investment in China. Beijing is sparring with Washington over semiconductors and the materials needed to make them. Ally Russia is sunk in a quagmire of its own making in Ukraine.
On an annual basis, economic growth accelerated, helped by a favorable comparison with 2022, when growth collapsed because of sporadic lockdowns under a government policy of eliminating even the tiniest Covid-19 outbreaks. That weakness in 2022 means the economy is still expected to meet or even exceed officials’ goal of expanding by around 5% this year.
Compared with the same quarter the previous year, growth in the second quarter accelerated to 6.3% from a 4.5% annual pace in the first quarter, a worse performance than the 6.9% pace expected by economists polled by The Wall Street Journal. The pickup in the annual rate was flattered by a deep slump in the second quarter of last year, when businesses in Shanghai were closed to contain a citywide outbreak of Covid-19.
The loss of momentum after an initial burst of activity at the beginning of the year means China will need to do more to revive household and business confidence and get the economy back on track, economists say.
“The Chinese economy is clearly sputtering,” said Eswar Prasad, professor of trade policy and economics at Cornell University and a former head of the International Monetary Fund’s China division. He said the figures highlight the need for more stimulus to power faster growth as well as policy changes that will help revive confidence in China’s private sector and spur faster productivity growth.
Beijing abandoned its strict Covid-19 controls around the turn of the year, paving the way for a rebound in activity as businesses resumed trading and consumers spent some of the savings they had squirreled away during the pandemic.
The hope was that China’s consumers would step up to power a durable recovery and a prolonged slide in the realestate sector would turn around, buoying the economy with demand for exports weakening as stubbornly high inflation and rising borrowing costs curbed spending in the West.
Monday’s data suggest that hope was misplaced. Retail sales in June rose just 0.2% compared with May, a sign that households are wary of spending.
Economists say their caution reflects anxiety about jobs and the wider economy and the lingering scars of the pandemic, such as lost income and jobs.
China’s headline measure of joblessness, the surveyed urban unemployment rate, held steady at 5.2% in June. But youth unemployment rose yet again, with joblessness among those aged 16 to 24 rising to 21.3% in June, from 20.8% in May.
Investment in buildings, machinery and other fixed assets rose just 0.4% in June compared with May, hurt by weakness in real estate. Industrial production expanded 0.7% over the same period.
The figures from China contrast with better economic news in the U.S. Inflation cooled last month to its lowest pace in two years, strengthening expectations the Federal Reserve will be able to finish its interest-rate increases without tanking the economy.