China's Post-Covid GDP Growth Recovery Falters

China’s economy expanded by just 0.8 percent from April through June compared to the first three months of the year. The following chart uses data by China’s National Bureau of Statistics (NBS) to show the country’s quarter-on-quarter change in gross domestic product. The starred numbers are the latest provisional figures that have been provided, but can change when revised.

During the pandemic, China enforced a strict “zero Covid” policy which brought industry to a standstill. These restrictions were scrapped at the end of last year, which initially saw the economy start to rebound. However, momentum has now started to slow.

When looking at a year-on-year change, China’s economy saw a 6.3 percent uptick in Q2 2023 compared to Q2 2022, which is slower than the 7.3 percent forecast by economists polled by Reuters. 6.3 percent may look good from the outset, but it’s important to note that this is largely due to a low base, since Q2 2022 had seen significant slowdown largely due to a two-month long lockdown in Shanghai.

The NBS’ latest figures also revealed that retail sales growth had slowed to just 3.1 percent in June, which is down from 12.7 percent in May. Meanwhile, exports fell 8.3 percent in June compared to one year before.