Communist China Economy Contracts Sharply in Second Quarter

Communist China reported a grim second-quarter economic performance on Friday, fueling concerns about the prospect of a global recession, UPI reported on July 15.

Communist China’s economy contracted by 2.6% in the second quarter, a sharp drop from the 1.4% growth in the first quarter, the National Bureau of Statistics said in a statement.

While countries like the U.S. have largely reopened, Beijing is still sticking to its “zero-coronavirus” approach of eliminating every outbreak through drastic measures. The economic downturn is also caused by a series of “Dynamic Covid-Zero” policies. According to Rhodium Group, an independent research firm, declines in freight and passenger traffic, property sales, the output of major construction materials and household consumption were all worse than official figures. The lockdowns have disrupted production in factories, bogged down supply chains, delayed shipments of goods to the rest of the world, as well as hindered normal trade and daily life of the people.

According to the Peterson Institute for International Economics in Washington, the Chinese economy is in very bad shape right now and consumer demand is very weak. Due to the severity of the lockdowns, Communist China is expected to miss its full-year economic growth target of 5.5%. About 4% would be a more realistic growth target.