China GDP: five things to look out for

China’s first-year economic growth was mainly a reflection of how the world’s second-largest economy was affected by the Covid-19 epidemic early last year, rather than by a slowdown.

Even domestic yields grew by more than 18 percent Annually between January and March, its increase in the last quarter of 2020 was only 0.6%.

China is expected to release a nearly 8% annual headline as the National Bureau of Statistics reveals its forecast for growth for the second quarter on Thursday. The goal, however, will be on signs of economic laziness and whether this is serious enough for the government to change policy.

Here are five things to keep in mind after announcing Thursday.

Will industrialization and economic growth increase?

China’s economy was strongly encouraged by the industry, growing at 24.5% per year in the first year, and establishing a stable economy, which grew by 25.6% per year in March.

All of this is linked to the growth process, the “cheap” one that Chinese authorities, under the direction of. The Voice He, second to the Prime Minister, wants to leave but is reluctant to help the country recover from the epidemic. For the past few months they have changed. Industrial growth increased by 15.4% year-on-year in May, while annual economic growth slowed to less than 10% in April and May.

Will China intervene?

People’s Bank of China on Friday reduced the number of banks they had to keep by 50 points, to 8.9 percent on average. This was the first download since March 2020.

Investigators are divided over whether the central bank will now raise money. Wei Yao, an economist at the Société Générale, thinks so. “This tool is not used when the economy is running smoothly,” he said, adding that other cuts were completed in less than a year and interest rates could be cut in 2022.

However, some speculate that the central bank is saying that the money saved last week was designed to help with the recession because temporary temporary lending will run out.

“The main purpose of the cuts is to reduce corporate spending by reducing banking costs,” said Larry Hu, a Chinese economist at Macquarie. “We don’t think so [the] a weakening of the economy or a slowdown in economic growth than expected in the future economic downturn. ”

Will Liu’s goal of overcoming financial hardship go beyond economic concerns?

PBoC reserves were demolished just two days after a Chinese government council, a cabinet minister, urged them to do so. But the central bank has ignored a similar call by the government in June 2020, highlighting the ongoing tensions between officials concerned about the financial crisis and concerns over growth.

Liu campers are worried that the economic system could take out indebtedness, which has led to error binding in the two largest provinces in China last year. Something very big bad credit manager and some of the most influential people in the country are also struggling to pay off their debts.

“China is wasting time dealing with its bad debt crisis,” said Diana Choyleva of Enodo Economics, adding that 2021 could be a “significant year” for China’s economy.

But supporting economic growth has always been important during times of crisis such as the epidemic, as well as before major political events such as the Chinese Communist Party. a centenary celebration this month. The crisis continues as the party tries to find a balance between growing growth and reducing financial risks at the party’s 20th annual general meeting next year, with President Xi Jinping expected to launch an unprecedented third phase.

Will the restrictions on the use of local government be lifted?

One of the hallmarks of a winner in these conflicts is the establishment of credit and financing for government vehicles, which play a role in great work you are saving for construction.

The overall economic downturn fell 3.6% year-on-year in May, the first decline in the year since the Covid crash in Wuhan last year closed the Chinese economy. The special cash flow is only Rmb1.2tn ($ 186bn) in the first five months of this year, compared to Rmb2.3tn in the same period last year.

Will China Covid’s approach restore growth?

Although China still has the opportunity to vaccinate 70 percent of the population by the end of the year, it shows no sign of abandoning its “zero-Covid” strategy to fight the epidemic. This could prevent more and more unaccounted for trips to the end of the Winter Olympics in Beijing next year, as well as further action. Short-term response soon cluster of disease At one of the largest ports in the country, there was a great deal of confusion among the exporters.

It is a reminder that although China has managed to stem the tide of the epidemic, its effects on other sectors of the economy will continue to be felt again next year, or beyond.