China's economy expanded 0.4 percent in the three months to June 30.

BEIJING, July 15 (TMTPOST) -- China registered its slowest quarterly growth in over two years with Coronavirus outbreaks in dozens of cities across China from April to June, 

The National Bureau of Statistics (NBS) on Friday released a long list of monthly and quarterly statistics, including industrial production, fixed asset investments, real estate sales and consumer product retails and energy production in June as well as household income and production capacity utilization rates in the quarter ended on June 30.  

The gross domestic product (GDP) of the world’s second largest economy expanded 0.4 percent in the second quarter, compared with the same period of 2021, according to the NBS. Meanwhile, the economy shrank 2.6 percent from the previous quarter. In the first quarter, the economy grew by 4.8 percent.

China’s annual economic growth target was set at around 5.5 percent. The lackluster performance in the second quarter seemed to make the annual goal hard to meet.

Fu Linghui, the spokesman of NBS, was upbeat about the possibility to meet the 2022 growth target. In a press conference held in Beijing, he said that the economy would rebound with the implementation of a package of economic policies aimed at keeping stable growth from May. He explained that in February China registered better economic performance than expected while the doldrums started in March and continued through April due to geopolitical changes and COVID-19 outbreaks across China.

Fu identified April as the worst month in terms of economic growth due to mounting global geopolitical risks and worsening COVID-19 outbreaks in China.

He pointed out that China’s economy still expanded in the second quarter despite poor economic indicators in April and May, which showed enormous resilience of China’s economy.

“The aftershock of the pandemic is a short-term thing and it is just an external factor. The trend of concerted regional economic growth will be not changed,” Fu said, adding that China will overcome the negative impact of the pandemic on the economy, with the implementation of effective measures to combat the coronavirus and a package of economic policies to stabilize growth.

SHANGHAI RECORDS HIGHEST JOBLESS RATES

In the second quarter, Shanghai reported a jobless rate of 12.5%, making it the only province-level administrative region with a double-digit unemployment rate, according to the NBS.

In accordance with Chinese Premier Li Keqiang’s requirement that statistics shall be released by province in late May, the NBS announced the breakdown of GDP, employment and fiscal revenue data accordingly.

China’s overall unemployment rate in the second quarter was 5.8% while the figure in the first half was 5.7%. However, the numbers varied significantly from province to province, with lockdowns as the decisive factor.

Shanghai was hit the most by the pandemic in the second quarter as the financial, manufacturing and shipping hub was locked down from late March through late May. The megacity recorded a 12.5 percent jobless rate for the second quarter and 8.9 percent for the first six months while the entire country registered 6.7 percent for the second quarter and 3.2 percent for the first half. After the lockdown was nominally lift in Shanghai on June 1, the unemployment in June fell to 7.0% but it was still far above the national average of 1.5%.

Jilin, the second worst hit in China, reported unemployment rates of 7.6 percent and 7.1 percent for the second quarter and the first half respectively. However, with the end of the lockdown in the northeastern province, the unemployment rate was still as high as 6.8 percent, indicating a slow economic rebound.

Liaoning, Inner Mongolia, Hebei, Tianjin, Henan and Shanxi reported a jobless rate higher than the national average, as they were also hit badly by the pandemic.

By contrast, Tibet and Xinjiang in west China registered jobless rates lower than the national average thanks to very few new cases in the two regions.  

REAL ESTATE MARKET COOLS

Most cities reported housing price declines but Guangzhou recorded five consecutive increases in monthly housing prices from February through June, according to monthly data on house prices in 70 large and medium-sized cities released by the NBS.

From February to June 2022, Guangzhou’s existing house price index rose by 0.6%, 0.3%, 0.5%, 0.2%, 0.5% month-on-month respectively, which was a reversal of the declines from September 2021 to January 2022.

Guangzhou house price increases, although slightly, stood out against the backdrop of price drops registered by other first-tier cities. The NBS data shows that in the first half of 2022, Beijing's existing house prices fall by 0.1% in May from a year earlier despite its overall upswing in the first half. Shanghai in April and May reported zero price growth. Shenzhen rose in April and May month-on-month, but fell month-over-month in other four months of the first half.

However, it does not necessarily demonstrate the recovery of Guangzhou’s real estate market. The volume of existing home transactions in Guangzhou fell but the housing price rose for five consecutive months. The increases are largely attributed to a higher proportion of luxury homes in total transactions, pushing up the average housing price.

The data from Guangzhou Centaline Real Estate Research Institute released on July 11 shows that 42,002 homes in Guangzhou were sold in the first six months of 2022, which was a sharp decline of 44.2% year-on-year.and also a new low in the past five years. From the single-month transaction data, the traditional off-season volume in February was only 4,176 units, and the remaining months were mostly below 8,000 units. By contrast, the average monthly volume of existing house property transactions in Guangzhou in 2021 was 9,759 cases.

The agency's data shows that 10 of Guangzhou's 11 districts saw their existing house transactions fall by both volume and price in the first half of the year, with volume declines ranging between 27.2% and 60.7% and average prices declines between 1.2% and 11.4%. Only in the city center of Tianhe District, the volume of sold existing housing fell but prices rose slightly.

Some analysts argued that the average price of existing homes was likely to be pushed up when the proportion of high-priced properties sold in the central area went up and the proportion of low-priced properties sold in the suburbs decreased.

This is supported by the fact that the volume of existing house transactions in the peripheral areas of Guangzhou fell more significantly compared to the central areas. The three districts with the biggest drops in volume in the first half of the year are Nansha District, Huangpu District and Zengcheng District, which reported volume drops of 61.0%, 55.3% and 54.4%, respectively

The volume of transactions in the central region fell by a narrower margin. Liwan District, Yuexiu District, Baiyun District and Haizhu District fell by 32.1%, 41.1%, 41.1% and 42.3% respectively. 

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