China’s economy returns to growth as virus lockdowns lifted

China’s economy rebounded from a painful contraction to grow by 3.2% in the latest quarter compared to a year ago

China became the first major economy to report growth following the coronavirus pandemic, recording an unexpectedly strong 3.2% expansion over a year earlier in the latest quarter as anti-virus lockdowns were lifted and factories and stores reopened.

Growth reported Thursday was a dramatic improvement over the previous quarter’s 6.8% contraction — China’s worst performance since at least the mid-1960s. But it still was the weakest positive figure since China started reporting quarterly growth in the early 1990s.

China, where the pandemic began in December, was the first economy to shut down and the first to start the drawn-out process of recovery after the ruling Communist Party declared the disease under control in March.

“The national economy shifted from slowing down to rising in the first half of 2020,” the National Bureau of Statistics said in a statement.

Manufacturing and some other industries are almost back to normal operating levels. But consumer spending is weak due to public unease about possible job losses. Cinemas and some other businesses still are closed and travel remains restricted.

Economists say China is likely to recover faster than some other major economies due to Beijing’s decision to impose the most intensive anti-disease measures in history. That included cutting off most access to cities with a total of 60 million people and suspending trade and travel.

In the three months ending in June, factory output rose 4.4%, a sharp rebound from the previous quarter’s 8.4% contraction as factories that make the world’s smartphones, shoes, toys and other goods reopened.

Retail sales shrank by 3.9%, but that was a marked improvement over the previous quarter’s 19% contraction while millions of families were confined to their homes and shopping malls were shut down.

Exports grew by an unexpectedly strong 0.4% in June but still are off 3% for the first half of the year. June imports rose 3% — including a 10.6% jump in purchases of U.S. goods despite a tariff war — but are down 3.3% so far this year.