China’s GDP Grows 6.3% in Second Quarter, Slightly Below Expectations

Credit: Visual China

By Li Qiying

BEIJING, July 17 (TiPost) – China’s gross domestic product (GDP) growth accelerated to 6.3% year-on-year in the second quarter of 2023, albeit slightly below market expectations.

The growth is attributed to a low year-on-year growth rate of 0.4% in the same period in 2022 and supportive policies implemented earlier in the year.

Data released by the National Bureau of Statistics (NBS) on Monday showed that China’s GDP expanded by 6.3% year-on-year in the second quarter of 2023, based on preliminary calculations. This represented a 1.8 percentage point increase from the first quarter. However, the Q2 quarter-on-quarter season-adjusted growth slowed to 0.8%, compared with the figure of 2.2% in Q1 2023. In the first half of the year, China’s economy grew by 5.5% year-on-year.

The faster year-on-year GDP growth in the second quarter is attributed in part to a low base in the same period of the previous year. During the second quarter of 2022, the COVID-19 pandemic-related prevention and control measures slowed economic growth, resulting in a mere 0.4% year-on-year GDP growth rate.

The performance in the second quarter this year was slightly below market expectations, as indicated by a recent survey involving 14 domestic and international organizations. According to the survey,  economists’ average forecast for year-on-year GDP growth in the second quarter was 7%, with a range from 5.8% to 8.3%. The actual performance of the economy in the second quarter aligned more closely with the lower end of these expectations.

China’s economy picked up in the first six months of 2023, mainly driven by the tertiary industry, which encompasses services and other non-manufacturing sectors. During the first half of 2023, the added value of the primary industry grew a 3.4% year-on-year, about the same from the first quarter. The total added value of the secondary industry expanded 4.3% year-on-year, marking a 1 percentage point acceleration compared to the first quarter. The tertiary industry grew by 6.4%, outpacing the overall GDP growth and representing a 1 percentage point increase compared to the first quarter.

In the first half of 2023, the respective added value of the primary, second and tertiary industries contributed to 5.1%, 38.9% and 56% of the total added value of the economy. Compared with the same period in 2022, the proportion of the primary industry remained flat, while the proportion of the secondary industry decreased by 1.6 percentage points. Conversely, the proportion of the tertiary industry increased by 1.6 percentage points year over year, indicating a continued recovery in the service sector as pandemic-related restrictions were lifted and economic and social activities gradually returned to normal.

In June, the index of services production saw a year-on-year increase of 6.8%. However, compared to the cumulative total from January to May, the growth rate slowed down by 4.9 percentage points. This suggests a marginal deceleration in the recovery of the service industry.

As the overall economy continued to recover, the employment situation remained largely stable. In June, the surveyed national urban unemployment rate stood at 5.2%, unchanged from May and also the lowest level since 2022 for the third consecutive month. The surveyed urban unemployment rate in 31 major cities stayed at 5.5%, also unchanged from May.

The youth unemployment rate climbed to 21.3% in June for the age group of 16-24. This figure represented a 0.5 percentage point increase compared to May and remained at its highest level for three consecutive months since the statistics began in 2018.

In contrast, the surveyed unemployment rate for the main working-age group (25-59 years old) held steady at 4.1%, the same as in May. Those with junior high school education or below had an unemployment rate of 4.4%, the same as individuals with high school education. Those with college education experienced a slightly lower unemployment rate of 3.9%, while individuals with a bachelor’s degree or above had the lowest unemployment rate at 3.2%. These findings suggest that individuals with lower levels of education faced higher unemployment rates compared to those with higher education levels.

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