China avoided a recession after its economy grew by 3.2% in the second quarter of 2020, indicating a recovery from the damage caused by the coronavirus pandemic. The economy had shrank by 6.8% in the first three months of the year, the first contraction since the end of the Cultural Revolution in 1976. The median forecast of analysts polled by Bloomberg had predicted growth of 2.4% in the second quarter. However, despite the rebound in the second quarter, the Chinese economy still shrank by 1.6% year-on-year in the first half of the year. The data confirmed that China will probably be the first major economy to achieve positive economic growth, with the United States, the European Union as well as Japan still struggling to reopen their economies. At the National People’s Congress (NPC) session in May, Premier Li Keqiang did not set an economic growth target for 2020.

In other figures released by the National Bureau of Statistics (NBS), industrial production rose by 4.8% in June after a 4.4% rise in May. Retail sales fell by 1.8%, better than the 2.8% decline in May. Fixed asset investment (FAI) fell 3.1% in the first six months of the year, an improvement from the 6.3% decline in the first five months. The surveyed jobless rate in urban areas stood at 5.7% in June, down from 5.9% in May and the recent peak of 6.2% in February. China’s government has set a target of creating 9 million new urban jobs in 2020, compared to 11 million last year, the South China Morning Post reports.

The internet and the digital economy are emerging as the new forces driving China’s economic development with faster growth of new industries, new forms of business and new business models, the NBS said. The China New Economic Driver Index, which measures the performance of the digital economy, jumped 23.4% in 2019 from a year earlier to 332 points. The Internet Economy Index, one of the five sub-indexes, surged 42% to 856.5, to contribute 80.5% to the growth of the combined index last year. The number of mobile internet users in China had reached 1.32 billion by the end of 2019, up 3.5% year-on-year. The country also recorded CNY34.8 trillion in e-commerce transactions in 2019, up 10.1% from a year earlier. Those transactions reached CNY1.99 trillion, an increase of 12.4% over the previous year. The sub-index for innovation-driven development rose 15.6% year-on-year to 201.4. National expenditure on research and development (R&D) was equivalent to 2.19% of GDP in 2019, 0.05 percentage points higher than the previous year. The number of patents granted per 10,000 R&D personnel reached 3,448, up 1.5 times from 2014. The overall value of contracts in the technology market increased by 26.6% in 2019. The other three major sub-index for economic vitality, human resources, and transformation and upgrading increased by 7.4%, 8.3% and 1%, respectively, from the previous year, the Shanghai Daily reports.

Real estate investment in Shanghai plunged 48% in the first half of 2020 to around CNY39.8 billion, according to a reports by Savills. “For the rest of this year, transaction volumes are expected to pick up as long as motivated sellers adjust pricing to meet the needs of investors who are currently sitting on the sidelines,” James Macdonald, Senior Director of Savills China Research said.

China’s foreign trade rose 5.1% year-on-year in June, with exports growing by 4.3% and imports by 6.2%. In the first half of 2020, overall foreign trade shrank by 3.2% year-on-year to CNY14.24 trillion due to the Covid-19 pandemic, with exports valued at CNY7.71 trillion, a drop of 3% from a year earlier, while imports fell by 3.3% to CNY6.53 trillion, the General Administration of Customs said. Director Li Kuiwen said that despite the overall foreign trade figure moderating in the six-month period, China’s foreign trade has been rebounding to achieve positive growth for three consecutive months since April. China’s foreign trade imports and exports added up to CNY7.67 trillion in the second quarter, down 0.2% year-on-year, but the decline narrowed compared with the 6.5% drop in the first quarter. China’s foreign trade with ASEAN topped CNY2.09 trillion, an increase of 5.6%, to account for 14.7% of China’s foreign trade in the first six months. Trade with the European Union added up to CNY1.99 trillion, down 1.8%. Trade with countries along the Belt and Road dipped 0.9% to total CNY4.2 trillion. In the first half of the year, private enterprises contributed CNY6.42 trillion to China’s exports and imports, up 4.9% year-on-year, accounting for 45.1% of the total foreign trade value, which was 3.5 percentage points higher than in the same period last year. Foreign-invested enterprises contributed CNY5.55 trillion to China’s foreign trade, accounting for 39%. State-owned enterprises accounted for 15.6% of the total.

Bilateral trade between China and the U.S. in the first half of the year fell 6.6% year-on-year. From January to June, China’s exports to the U.S. plummeted 8.1% to CNY1.25 trillion, while imports from the U.S. were down 1.5% to CNY395.62 billion, according to customs data. The U.S. is China’s third-largest trading partner. The trade figure would have been much lower if China hadn’t bought substantial amounts of soybeans to meet its promises in the phase I trade deal with the U.S. In total, China imported 45.04 million tons of soybeans in the first half of this year, up 17.9% on a yearly basis.

Foreign direct investment (FDI) saw an 8.4% year-on-year increase in the second quarter. In June, FDI inflows expanded 7.1% year-on-year to CNY117 billion. While FDI fell 1.3% in the first half to CNY472.18 billion, the decline narrowed by 9.5 percentage points from the first quarter. FDI from Singapore jumped 7.8% and from the United States by 6%. In the first half of 2020, China’s non-financial outbound direct investment (ODI) fell 0.7% year-on-year to CNY362.14 billion, the Ministry of Commerce (MOFCOM) said.