China’s Growth Slows as Pandemic Fears Persist

Growth in the world’s second-largest economy lost steam as consumers remained cautious and as more expensive raw materials weighed on factories.

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After a year of leading the global economy out of the pandemic slump, China’s growth is now starting to slow.

The rising cost of raw materials is eating into the profits of factories and retailers. People are hesitant to spend as small outbreaks of Covid-19 remind them that the pandemic is not over yet.

China reported on Thursday that its economy grew 7.9 percent from April through June, compared to the same period last year. While that pace is still stronger than in many other countries, it is markedly slower than the 18.3 percent leap the economy made in the first three months of the year, and fell short of estimates.

The lesson for the rest of the world is that even with outbreaks under control, the fallout from the pandemic may dampen consumer confidence and hurt companies’ margins. That raises questions about the resilience of rebounds in other nations’ economies, as outbreaks recur from the American South to parts of Britain, Indonesia and Australia.

Li You and Liu Yi contributed research.

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