China’s Growth Slows as Pandemic Fears Persist

Barclays Bank said in a research note that China seems to have settled into a new annual growth range of 5 to 5.5 percent. While considerably better than the growth in most Western countries, it is slower than the 6 to 6.5 percent growth China saw before the pandemic.

“At home, the economic recovery is unbalanced,” said Liu Aihua, the spokeswoman of China’s National Bureau of Statistics. “More efforts are needed to consolidate the foundation for the steady recovery of development.”

Some of the problems Chinese businesses face are common across the world. Globally, commodities like iron ore, copper and oil have become more expensive over the past year, as have industrial materials like steel.

For Song Liyun, a seller of stoves and range hoods in Jinan, an eastern Chinese city, the rise in global steel costs has meant a 30 to 40 percent jump in wholesale prices, much of which she has had to absorb. “The cost of materials has been rising, but the price we offer to customers can barely increase,” she said.

The survival of small businesses now has an even greater bearing on how China can weather the pandemic and keep people employed. More than 100 million people work in retail and wholesale companies.

The data released Thursday seemed to show that consumer spending was no longer sharply slowing. Retail sales were up 12.1 percent in June from a year earlier, according to China’s National Bureau of Statistics. That was stronger than expected, and was the first time in three months that the measure had not fallen short of predictions.

Most economists had expected retail sales to be weak in June. Car sales had fallen sharply and new Covid-19 outbreaks in Guangdong had triggered lockdowns of large neighborhoods and restrictions on social gatherings and travel. But a surge in online spending rescued retail sales as Chinese consumers stocked up on home electronics.

Li You and Liu Yi contributed research.

Article source: https://www.nytimes.com/2021/07/14/business/chinas-economy-cooling.html