China’s economy further hit by unemployment

China’s economy experienced slower-than-expected growth in the second quarter, while youth unemployment reached a record high, according to official data released on Monday. Gross domestic product (GDP) expanded by 0.8 percent compared to the previous quarter, reflecting lacklustre domestic and international demand.

Although the year-on-year GDP growth stood at 6.3 percent, it should be noted that this figure is partly influenced by the low base of comparison with 2022 when Beijing’s “zero COVID” policies brought economic activity to a halt.

In June, retail sales increased by 3.1 percent compared to the same period last year, while industrial production output rose by 4.4 percent. Economists had anticipated a growth rate of over 7 percent for China’s overall economy.

However, China’s National Bureau of Statistics (NBS) highlighted that the results indicated positive momentum in the economy’s recovery from the pandemic. Fu Linghui, the NBS spokesman, stated that GDP grew by 4.5 percent year-on-year in the first quarter and 6.3 percent in the second quarter. He also mentioned the gradual recovery of market demand, increased production supply, stable employment and prices, and steady growth in residents’ income.

The data also revealed a concerning trend of rising youth unemployment in China. In June, the joblessness rate among Chinese youth reached a record high of 21.3 percent, up from 20.8 percent in May, according to the NBS.

To address these challenges, Beijing has set a conservative growth target of about 5 percent for 2023, considering the country’s recent economic trends.

China’s economy officially grew by 3 percent in 2022, representing one of its weakest performances in decades. The strict “zero COVID” measures implemented during that year led to the closure of businesses and kept consumers at home.