China Economic Quarterly Q2 2021

China’s GDP growth reached 7.9% in Q2 and 12.7% in the first half of the year, while the threat of COVID-19 continues to be present.

This issue provides an overview of the macroeconomic trends in Q2 2021, some policy updates and hot topic analysis.



Here are some macro-economic highlights:

  1. GDP growth increased by 7.9% in Q2 and 12.7% in H1
  2. Total fixed asset investment reached 25.59 trillion yuan and increasing by 12.6%
  3. Total real estate investment increased by 15.0% and reached 7.22 trillion yuan
  4. PMI dropped to 50.9% in June, but still remained above the threshold of 50%
  5. The growth of industrial added values increased by 15.9% in H1
  6. Total retail sales of consumer goods increased by 23.0% to 21.19 trillion yuan in H1
  7. Imports and exports increased by 27.1% and reached 18.07 trillion yuan in H1
  8. PPI rose significantly in Q2 and hit a new high whereas CPI remained stable

Policy updates

Total aggregate financing to the real economy increased by 17.74 trillion yuan in H1
According to the People’s Bank of China (PBoC), total aggregate financing to the real economy (AFRE) increased by 17.74 trillion yuan in the first half year, which was 3.17 trillion yuan less than the same period in 2020 and 3.12 trillion yuan more than the same period in 2019. 

Fiscal revenue grew by 21.8% while fiscal spending increased by 4.5% in H1
In the first half year, as a result of strong economic recovery, the low base from last year and rising industrial producer prices, the national public budget revenue grew by 21.8% year-on-year to 11.71 trillion yuan. It increased by 8.6% compared to H1 2019. Meanwhile, national public budget expenditure went up by 4.5% to 12.17 trillion yuan.

Hot topic analysis: Business implications of the seventh national population census

China’s seventh decennial population census revealed demographic shifts that are likely to affect national economic and social policies with dramatic implications for the business sector. For example, in order to improve the fertility rate and reduce the cost of education for children, the Ministry of Education recently promulgated regulations on out-of-school education.

Implications and opportunities

  • Quantity of population: increase fertility rate with strong policy support.
  • Structure of population: to tackle the challenges imposed by an ageing population, deferred retirement age and the continuous reduction of labour-intensive industries and jobs will gradually become the new normal.
  • Quality of population: increasing investment to improve the quality of education and training can offset the disadvantages of declining population.
  • Distribution of population: accelerating urbanisation with coordinated regional city cluster development.

Previous issues of China Economic Quarterly

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Elton Yeung

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