China's economy accelerated at a fast pace in the second quarter of this year as it continued to recover from the coronavirus-induced slowdown but the pace of growth was slower than expected.
Gross domestic product in the world's second-largest economy expanded by an annual 6.3 per cent from April to June, after growing 4.5 per cent in the previous three months as the country removed Covid-19 restrictions and reopened, according to the latest data released on Monday by the National Bureau of Statistics.
However, the pace of growth in the second quarter missed the 7.1 per cent estimate of economists polled by Bloomberg and the 7.3 per cent forecast of those surveyed by Reuters.
Quarterly GDP growth was only 0.8 per cent between April and June, compared with the previous three months.
China's retail sales grew 3.1 per cent in June, slowing from 12.7 per cent in May, the data showed, while the urban surveyed unemployment rate in 31 major cities stood at 5.5 per cent, the same as that of the previous month.
The unemployment rate for the 16 to 24 age group was 21.3 per cent while that for the 25 to 59 age group was 4.1 per cent, government data showed.
Industrial output growth accelerated at an annual 4.4 per cent in June, from 3.5 per cent in May.
The Manufacturing Purchasing Managers’ Index for June stood at 49 per cent while the Production and Operation Expectation Index was at 53.4 per cent.
A reading over 50 indicates an expansion in business conditions, while one below represents a contraction.
"Recent economic data out of China have pointed to declines in exports, weak retail sales and continued troubles in the Chinese property market, which are all factors likely to have weighed on activity in the second quarter," Emirates NBD economists said in a research note.
The People’s Bank of China (PBOC), left its benchmark interest rate unchanged on Monday at 2.65 per cent. It had cut the key policy rate in June.
"To negate weak internal demand and eroding consumer confidence, expansionary fiscal stimulus measures are likely to be more effective than more interest rate cuts, and accommodating monetary policy in a deflationary environment reduces the 'marginal benefit' from an extra added effort of monetary policy stimulus; a 'liquidity trap scenario'," said Kelvin Wong, a senior market analyst at Oanda.
China’s benchmark CSI 300 stock market index fell 1.09 per cent as of 7.46am UAE time, its first decline since July 12. The onshore yuan weakened by 0.31 per cent to 7.1776 per dollar.
"The Chinese property downturn, risk of disinflation, and falling exports have been difficult to reverse. As a result, the knee-jerk reaction in markets was unenthusiastic," said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank.
China's recovery has been weaker than expected due to sluggish domestic and international consumer demand in line with International Monetary Fund's expectations of a “rocky” recovery for the global economy as geopolitics, monetary tightening and inflation, although declining, continue to weigh on growth.
World trade growth is expected to decline this year to 2.4 per cent, despite an easing of supply bottlenecks, before rising to 3.5 per cent in 2024, after growing by 5.1 per cent in 2022, according to the fund.
The IMF estimates China's economy will grow by 5.2 per cent in 2023, following a 3 per cent expansion in 2022, as it benefits from a full reopening this year.
Some analysts expect the PBOC to provide more stimulus and the government to boost spending to spur growth.
Earlier in the year, Goldman Sachs had said the reopening of China’s economy and a full recovery in the country's domestic demand could raise global output by about 1 per cent in 2023 and lead to a rally in oil prices.
India and China will account for half of global growth this year, compared with only a tenth for the US and euro area combined, according to the IMF.
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What is Financial Fair Play?
Introduced in 2011 by Uefa, European football’s governing body, it demands that clubs live within their means. Chiefly, spend within their income and not make substantial losses.
What the rules dictate?
The second phase of its implementation limits losses to €30 million (Dh136m) over three seasons. Extra expenditure is permitted for investment in sustainable areas (youth academies, stadium development, etc). Money provided by owners is not viewed as income. Revenue from “related parties” to those owners is assessed by Uefa's “financial control body” to be sure it is a fair value, or in line with market prices.
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There are a number of punishments, including fines, a loss of prize money or having to reduce squad size for European competition – as happened to PSG in 2014. There is even the threat of a competition ban, which could in theory lead to PSG’s suspension from the Uefa Champions League.
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Sheikh Zayed's poem
When it is unveiled at Abu Dhabi Art, the Standing Tall exhibition will appear as an interplay of poetry and art. The 100 scarves are 100 fragments surrounding five, figurative, female sculptures, and both sculptures and scarves are hand-embroidered by a group of refugee women artisans, who used the Palestinian cross-stitch embroidery art of tatreez. Fragments of Sheikh Zayed’s poem Your Love is Ruling My Heart, written in Arabic as a love poem to his nation, are embroidered onto both the sculptures and the scarves. Here is the English translation.
Your love is ruling over my heart
Your love is ruling over my heart, even a mountain can’t bear all of it
Woe for my heart of such a love, if it befell it and made it its home
You came on me like a gleaming sun, you are the cure for my soul of its sickness
Be lenient on me, oh tender one, and have mercy on who because of you is in ruins
You are like the Ajeed Al-reem [leader of the gazelle herd] for my country, the source of all of its knowledge
You waddle even when you stand still, with feet white like the blooming of the dates of the palm
Oh, who wishes to deprive me of sleep, the night has ended and I still have not seen you
You are the cure for my sickness and my support, you dried my throat up let me go and damp it
Help me, oh children of mine, for in his love my life will pass me by.
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