China’s recovery slows amid government crackdown to tighten control over economy

China’s recovery slows amid government crackdown to tighten control over economy

China’s recovery slows amid government crackdown to tighten control over economy
China’s recovery slows amid government crackdown to tighten control over economy

An employee inspects a circuit board on the controller production line at a Gree factory, following the coronavirus disease (COVID-19) outbreak in Wuhan, Hubei province, China August 16, 2021. China daily via REUTERS

The recovery of economic activity in China last August continued to deepen its slowdown, according to the latest data from Industrial production and retail trade evolution published this Wednesday by the country’s National Statistics Office.

In the case of industrial production, in August there was a 5.3% year-on-year growth, which represents a decrease of 1.1 percentage points with respect to the increase observed in July. Thus, Chinese factories’ production has slowed for six months.

By industrial sectors, mining grew 2.5% (1.9 points more than in July), the manufacturing industry rose 5.5% (seven tenths less) and the production of electricity, heating, gas and water grew 6.3% (6.9 points less). The high-tech manufacturing sector rebounded 18.3% (2.7 points more).

In the whole of the first eight months of the year, Chinese industrial production grew by 13.1%.

For its part, the volume of retail trade in the Asian country in the month of August reached an amount of 3,439 trillion yuan (452,242 million euros), which represents a growth of 2.5% in year-on-year terms. This increase is 2.1 points lower than that registered in July and it is the worst reading of the data in the last 12 months.

Archive image of an aluminum warehouse in Wuxi, China. September 26, 2012. REUTERS / Aly Song
Archive image of an aluminum warehouse in Wuxi, China. September 26, 2012. REUTERS / Aly Song

In the whole of the first eight months of 2021, the total volume of retail commerce reached 28.122 trillion yuan (3.698 trillion euros), 18.1% more than last year.

The data is known at a time when China’s government embarks on an offensive against a wide range of sectors, including technology companies and private education, with the aim of strengthen your grip on the world’s second largest economy. President Xi Jinping, which is also in the midst of a campaign targeting the country’s wealthy, calls for “common prosperity.”

In the last days the attention of government, investors and analysts is focused on the situation of real estate giant Evergrande. The mammoth company recognized that it may not be able to assume its obligations, exceeding 300,000 million dollars, This generates fear among buyers, investors and contractors of a bankruptcy that would have repercussions in the second world economy.

Recovery could also be affected by new restrictions that the authorities dictated in several cities before the last rebound in COVID-19 infections.

(With information from Europa Press and AFP)

Keep reading:

Protests grow in China: Evergrande real estate has more than a million houses paid for by clients, but cannot build them

China confined a city of 5 million people due to a COVID-19 outbreak among schoolchildren

The Chinese regime tightens control over the Internet: it seeks to promote “socialist values” and stop the spread of “rumors”

 
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