Both official and independent data show that China’s economy has contracted further in the second quarter of this year, with an unexpected slowdown in manufacturing and an intensifying recession in the property sector. That raises concerns about a wave of layoffs later this year, adding to China’s already severe unemployment problem.
China’s economy deteriorated further in July, according to an early August report from the China Beige Book International (CBBI), which provides independent economic data. According to his latest CBBI survey, China’s factory output and new production orders are at their lowest since mid-2020, while retail employment has reached its lowest level in more than two years. Manufacturers and retailers’ revenue growth slowed and profits fell, the report said.
Official data on Aug. 1 revealed even worse numbers in manufacturing and real estate. China’s manufacturing Purchasing Managers Index (PMI) fell 1.2% to 49.0 in July from the previous month’s 50.2, below the critical level of 50, according to data released by the Chinese government’s Bureau of Statistics.
In July, more COVID-19 cases sprang up in parts of China, prompting the Communist government to continue strict “zero COVID-19” measures and lock down many cities, including industrial centers and economic hubs.
Manufacturing activity picked up in June after lockdowns were lifted in parts of mainland China, but is now sluggish again.
The China Real Estate Index Institute reported that the average monthly price of new homes in 100 cities in mainland China fell instead of rising in July, with average home prices falling even more sharply. New housing prices fell sharply in urban areas, especially in the Yangtze River and Pearl River Delta, where house prices were on an upward trend.
Property sales in the 17 cities tracked by the Index Research Institute fell 33.4% month-over-month in July, compared with an 88.9% increase in June when lockdowns were lifted.
high unemployment
Employment in the country’s manufacturing sector continues to shrink, with the employment index dropping to a 27-month low, according to a report by Caixin, a major Chinese financial website. The report cited cost-cutting measures at factories, sluggish sales and an industry-wide “recruiting cautious attitude” as reasons for the layoffs.
In addition, about 11 million university students in mainland China graduated in the summer. This is the best ever. According to official data released by the Chinese government, the urban youth unemployment rate of 16-24 years old rose to 19.3% in June, also a record high.
Consumer confidence remains fragile due to widespread employment uncertainty. Many people who still have jobs are hesitant to spend money.
Mainland China’s economic growth slowed to 0.4% year-on-year in the second quarter, according to official data. The Chinese regime is known for its lack of transparency and often reports false figures, leading the outside world to believe that China’s economy may even be in recession already.
dim outlook
At a meeting of the Politburo of the Communist Party of China (CCP) on July 28, the administration said the international environment this year would be “complex and tough” and domestic challenges would be “difficult and arduous”. admitted. The Chinese Communist Party leadership has kept quiet about his 5.5% economic growth target he set this year. Analysts say this suggests that the Chinese Communist Party ultimately believes it will be unable to achieve this goal.
Tang Jingyuan, an independent commentator on current affairs, told The Epoch Times that China’s real estate market, a key industry and the largest source of investment and revenue for local governments, is intensifying. “Manufacturing jobs continue to shrink, unemployment is at a record high, and manufacturing is responding to the Chinese economy’s exports. ‘, he said.
“These data show that the three pillars of the Chinese economy – investment, exports and consumption – are generally slowing or stalling. We are sticking to the COVID ‘policy, which will only hurt the Chinese economy,’ said Tan.
“Worse still, the economic crisis in China is not a question of whether we can hit our target growth rate, but whether we can stabilize the economy in the next five or ten years.”
Xu Jian contributed to the report.
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Alex Wu is a US-based writer for The Epoch Times focusing on Chinese society, Chinese culture, human rights and international relations.