Despite the fact that China was one of the first countries to celebrate economic victory after the coronavirus crisis, fresh macroeconomic statistics show that China should be braced for a longer path to recovery. Notably, earlier there was no proof, only speculation of some agencies about such a problem. However, China’s government rang the alarm bell.
Chinese policymakers admitted that the economic recovery significantly slowed down due to natural disasters and an outbreak of the Delta variant. "Due to the increasingly complex and severe external environment, and the combined impact of the sporadic local outbreaks of COVID-19 and natural disasters on the economies of some regions, the recovery is still unstable and uneven," NBS spokesperson Fu Linghui said.
One can hardly doubt his words. Severe floods caused by climate change and a new coronavirus outbreak are slowing down the growth of production and retail sales. The National Bureau of Statistics reports that in July, industrial production increased by 6.4% year-on-year and retail sales rose by 8.5%, undershooting analysts' expectations. New restrictive measures imposed to combat the spread of coronavirus have a negative impact on consumption and hurt exports. GDP is projected to grow by 6.8% in the third quarter. However, many economists believe that this forecast is unlikely to come true.
According to the NBS, at the current stage, "the foundations for the domestic economic recovery are not yet solid." Thus, many national companies in the service sector, as well as small businesses, are experiencing financial difficulties.
