China's GDP declines 1.6% in first half of 2020, up 3.2% in Q2

China's economy returned to modest growth in the second quarter of 2020 and reverted from the first contraction on record in the first quarter of this year, as COVID-19 eases and policymakers announced economic packages, official data showed Thursday.

The world's second-largest economy grew by 3.2 percent in April-June from a year earlier, reversing a 6.8-percent decline in the first quarter – the first contraction since at least 1992 when official quarterly gross domestic product (GDP) records started, according to China's National Bureau of Statistics. In the first half of 2020, China's economy declined by 1.6 percent year on year.

The news coincides with an AFP poll which projected China's economy to claw its way back into growth territory in the second quarter of this year, after the coronavirus pandemic handed the world's second-largest economy its first contraction in decades. It also forecast China is set to be the only major economy to experience positive growth this year.

In the first half, the country's added value of major industrial enterprises declined by 1.3 percent year on year, 7.1 percentage points slower than the decline in the first quarter. But the figure soon grew by 4.4 percent in the second quarter.

The decline of the service sector narrowed in the April-June period and modern service industries showed robust growth, with added value of tertiary industry going up 1.9 percent in the second quarter and overcoming a 5.2-percent tumble from January through to March.

In the first half of 2020, China's goods trade, in U.S. dollar terms, contracted by 6.6 percent year on year to settle at 2.02 trillion U.S. dollars. During the same period, exports edged down by 6.2 percent year over year to reach 1.10 trillion U.S. dollars, while imports tumbled by 7.1 percent to meet 930.9 billion dollars.

Thursday's economic batch also revealed China-U.S. trade reaching the tune of 1.64 trillion yuan, falling off 6.6 percent from the same period a year earlier. Among them, exports to the U.S. stood at 1.25 trillion yuan after going down 8.1 percent; imports from the U.S. settled at 395.62 billion yuan, down 1.5 percent, with trade surplus sinking by 10.8 percent.

The U.S. economy contracted in the first quarter at its sharpest pace since the 2008 Great Recession as stringent measures to slow the spread of the novel coronavirus almost shut down the country, ending the longest expansion in the nation's history.

U.S. gross domestic product is tipped to shrink an unprecedented 35.0 percent this quarter after contracting by 4.8 percent in the first quarter, on a seasonally-adjusted annualized basis, according to a Reuters poll in April.

China's inflation further sailed into the growth territory in June, with its main gauge of the consumer price index moving upward by 2.5 percent from a year earlier. The indicator expanded 0.1 percentage points as compared to May due to prices rise in pork and vegetables.

Meanwhile, China's producer price index (PPI), which measures costs for goods at the factory gate, fell by 3.0 percent from a year earlier, lower than the 3.2-percent contraction tipped by analysts in a survey by Bloomberg.

The PPI figure ended four consecutive months of falls, increasing by 0.1 percent in June on monthly basis, as prices of international bulk commodities rebounded and domestic manufacturing sector regained some ground. In the first half of the year, PPI fell by 1.9 percent, weighed on by the COVID-19 pandemic.

(CGTN)