China registered an economic growth of 4.8 per cent in the first three months of 2022. However, the first quarter growth was well below the ruling Communist Party’s official target of 5.5 per cent for the entire year, according to official data released on Monday.
The country’s gross domestic product grew 4.8 per cent year on year during January to March, picking up pace from a 4 per cent increase in the fourth quarter last year, data from the National Bureau of Statistics (NBS) showed on Monday.
In India, the financial year is calculated from April 1 to March 31. However, in China, the fiscal year is the same as the calendar year. So, the financial year in China is calculated from January 1 to December 31.
The economic growth remained below the official estimates as fresh outbreaks of Coronavirus prompted the shutdown of major industrial cities, including the financial hub of Shanghai.
Also, there was a slump triggered by tighter government controls on the use of debt by China’s vast real estate industry. Forecasters have said that will be hard to meet without more government stimulus spending, according to The Associated Press (AP).
Retail sales in China fell 3.5 percent year-on-year in March. This was the first contraction since August 2020, according to a report in China’s official media, Global Times.
Retail sales are considered as the main parameter to gauge consumption.
Observers of China’s economy also cited “unprecedented downward pressure since the first quarter of 2020 due to coronavirus flare-ups, supply chain snags and external uncertainties arising from the Russia-Ukraine conflict,” as per the Global Times report.
CHINA GDP GROWTH
Earlier, China set its gross domestic product (GDP) growth target for 2022 at around 5.5 per cent to focus on slower growth in order to stabilise its economic fundamentals this year, as the world’s second-largest economy beefed up supportive measures to shore up growth against strong headwinds.
“We must be aware that the domestic and international environment is becoming increasingly complicated and uncertain, and that economic development is facing significant difficulties and challenges,” NBS spokesperson Fu Linghui said on the Q1 figures.
“With regard to the trend of the next stage, although there is some pressure in the short term on the economy from the perspective of the whole year, China’s economy is expected to maintain a recovery trend of development,” he said.
Last Friday, China’s central bank, in a much-anticipated move, cut its reserve requirement ratio (RRR), or the amount of cash that banks must hold in reserve, to shore up its slowing economy amid growing headwinds.
COVID-19, LOCKDOWN IN CHINA
The current surge of the Omicron virus in China which is sending one city after another into prolonged lockdowns was largely expected to have an adverse impact on the economy.
After big cities like Xian and Shenzhen, a lockdown was imposed in Shanghai, China’s biggest business and economic hub.
The city is in the third week of lockdown. The city of 26 million came to a standstill as it continuously reported about 30,000 cases in the last two weeks with no let-up.
Shanghai acts as one of the leading drivers of China’s $18 trillion economy.