Categories: Economy

China’s consumption growth remains patchy amid resurgence of Covid 19

<p>
The resurgence of Covid 19 in parts of China, which was the first country to register growth amid the pandemic, has once again cast a shadow over economic revival. Covid induced restrictions have been already imposed in several provinces, affecting both consumers and businesses.</p>
<p>
What is more worrisome is that the recovery has been patchy with muted consumption growth in several provinces.</p>
<p>
Even under the guidance of President Xi Jinping’s new “dual circulation” strategy, which seeks to tap China’s huge domestic market to power future growth, local consumption is recovering more slowly than exports, as foreign demand for Chinese goods surged during the pandemic, <a href="https://www.scmp.com/economy/china-economy/article/3144093/coronavirus-amplifies-chinas-regional-economic-divide-some">South China Morning Post</a> said.</p>
<p>
<strong>Also read: <a href="https://www.indianarrative.com/economy-news/china-s-factory-activity-slows-down-in-july-106094.html">China's factory activity slows down in July</a></strong></p>
<p>
Meanwhile Goldman Sachs Group has slashed China’s growth projection for the current year to 8.3 per cent from 8.6 per cent. After registering an 18.3 per cent growth in the first quarter of this year, China’s growth slowed to 7.9 in the April to June quarter.</p>
<p>
“Even though a year and a half has passed since the pandemic hit, some places still haven’t recovered to their pre-pandemic levels and so experienced negative growth. This is actually quite surprising,” SCMP quoted Zhang Zhiwei, President and Chief Economist at Pinpoint Asset Management as saying.</p>
<p>
Zhang also said that the impact of the pandemic on economic growth may be longer than anticipated.</p>
<p>
The economic slowdown has also led to an increase in the level of non performing assets for China’s banks.</p>
<p>
China Banking and Insurance Regulatory Commission Guo Shuqing even warned of a further rise in bad loans this year.</p>
<p>
“The banks have been aggressively lending towards the ambitious Belt and Road Initiative. However now the government has tightened the regulatory norms, which will make it difficult for the banks and local governments to freely lend,” an analyst told India Narrative. He added that this has further led to concerns.</p>
<p>
Analysts said that the slowing of economic growth in China in the April-June quarter marks a halt to the anticipated V-shaped recovery in the post Covid phase.  </p>

IN Bureau

Recent Posts

“Directly a message to the Chinese government,” say Dalai Lama’s followers after he leaves succession choice to Gaden Trust

Follower of the Dalai Lama expressed their elation at his statement that Gaden Phodrang Trust…

16 hours ago

Remain concerned about situation in East China Sea, South China Sea: Quad Foreign Ministers

The Foreign ministers of the Quad nations met in Washington, DC, on July 1 to…

23 hours ago

Buddhist Nechung’s oracle comes in form to bless Tibetan government in-exile ahead of Dalai Lama’s birthday

Ahead of the Dalai Lama's 90th birthday celebration, the Tibetan Buddhist oracle, Nechung, comes in…

23 hours ago

Union Cabinet approves National Sports Policy 2025, says it will establish India as “formidable force in global sports”

The Union Cabinet, chaired by Prime Minister Narendra Modi, on Tuesday approved the National Sports…

2 days ago

Electricity and internet crisis disrupts life in PoJK’s Muzaffarabad

Residents of Muzaffarabad in Pakistan-occupied Jammu and Kashmir (PoJK) are grappling with ongoing disruptions in…

2 days ago

Pakistan: Karachi’s water crisis deepens as power outage halts key pumping station

Residents across Pakistan's Karachi continue to grapple with a worsening water shortage, as electricity supply…

2 days ago