13 to 20 July: China’s GDP growth rebounds in second quarter

Gross domestic product in China bounced back in Q2, with the economy growing 3.2% YoY. This followed the 6.8% decline in Q1 and exceeded economist forecasts of 2.5%. Industrial production was bolstered by stimulus measures from authorities and grew 4.4% YoY in Q2, with most of the growth coming from energy production, raw materials and tech components. However, retail sales remained soft, falling 3.9% in Q2. We see an uneven picture forming in consumer spending; with certain areas like premium autos remining robust and covid affected sectors like leisure recovering at a much slower pace. Meanwhile, a separate report showed that exports and imports both rose in June, rising 0.5% and 2.7% respectively. Demand for Chinese exports is improving in key markets like the U.S. and EU as a result of easing lockdown measures and improving consumer spending.

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