China avoids Covid-19 recession with 3.2% growth in last quarter – business live

China avoids Covid-19 recession with 3.2% growth in last quarter – business live

Pedestrians in the Central Business District (CBD) in Beijing Photograph: Wang Zhao/AFP/Getty Images

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China has become the first major economy to return to growth since the Covid-19 pandemic began. But, a surprise drop in retail sales in June suggests there is more economic turbulence ahead.

Chines GDP grew by 3.2% in April-June, on an annual basis, the latest government figures show. That follows the 6.8% contraction in January-March as its economy shut down.

It's still much weaker than the 6%+ growth which China was averaging before the pandemic, but Beijing policymakers will be relieved that their stimulus efforts appear to be feeding through to companies and consumers.

Holger Zschaepitz

(@Schuldensuehner)

#China grew 3.2% in Q2 YoY, recovering from record 6.8% contraction in Q1. Has avoided recession. But debt problems piling up. In H1 2020, lenders issued record $1.7tn in fresh loans. In past, China outgrew bad debts, but that's unlikely to work this time. https://t.co/0gAjobxdY5 pic.twitter.com/mJgqyLbvfB

July 16, 2020

But despite this growth, China's economy is still 1.6% smaller than at the end of 2019.

Liu Aihua, spokeswoman for the country's National Statistics Bureau, told reporters tht