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China’s economy contracts for first time in nearly 50 years


Analysts in China and abroad have long harboured doubts about the accuracy of the official data, suspecting that the numbers are massaged for political reasons. 

But Goldman Sachs noted “the decision to publish something much lower than any previous quarterly GDP reading represents marked progress which will likely enhance the credibility of official statistics”.

Retail spending, which accounted for 80pc of Chinese economic growth last year, sank 19pc in the first quarter year-on-year, while China’s other major growth driver, investment in factories and other fixed assets, fell 16.pc.

Although factories and offices started reopening in early March, cinemas, hair salons and other businesses that are considered non-essential remain closed and tourism is struggling to recover as most foreigners are banned from entry to the country.

Car sales plunged 48.4pc in March from last year, which was better than February’s 81.7pc drop but adds to a two-year decline that was already squeezing manufacturers in the car industry’s biggest market.

Exports lost 6.6pc in March year-on-year, a better performance than January and February, but forecasters warn that trade is likely to remain dismal now the centre of the virus has shifted to Europe and the US.


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