Is China set for a sharp slowdown?: QNB report

Doha: China has been outperforming all major economies for decades, becoming one of the world’s most important growth engines.

This pattern of Chinese outperformance has continued last year, as the COVID-19 pandemic ravaged activity across continents. In fact, China was the only major economy to present positive GDP growth in 2020, with the economy expanding by 2.3 percent, versus a contraction of 3.5 percent and 6.5 percent for the US and the Euro area, respectively. However, while the pandemic shock has been limited and short for China, followed by a quick recovery, there are strong signs that the economy is already starting to slowdown substantially. After experiencing a strong out-turn of 18.3 percent on a year-on-year basis in the first quarter of this year, the Chinese economy decelerated to 7.9 percent in the second quarter. Importantly, the slow down has been broad, including several major components of the economy, such as industrial production, investments and retail sales.