China's economy rebounded substantially in the second quarter with stronger-than-expected GDP growth of 3.2 percent from a year earlier, and economists said that such recovery momentum is likely to be sustained in the coming quarters as policies are expected to remain supportive and flexible.
China's economic recovery is vulnerable to losing momentum as key trading partners from Japan to the USA struggle with resurgences of the deadly coronavirus and resort to fresh measures to control its spread.
However, analysts noted some domestic challenges, as retail sales in China declined 3.9 percent year on year in the second quarter. The economic downfall in the first quarter was the biggest since the time quarterly GDP records began.
"While in general it's fair to say that the numbers beat expectations, what the numbers also reveal is that we're seeing that the China consumer remains behind in terms of the recovery story", said Rodrigo Catril, a foreign exchange strategist at NAB in Sydney.
"This recovery was led by industry and construction, where output in Q2 was more than 2% above pre-virus highs".
"China's economy, as well as the global economy, remains very vulnerable to a second wave of the pandemic, which could break out by winter", Lu said.
Indeed, the consumption downturn has been telling.
The coronavirus, which first emerged in the city of Wuhan late a year ago, has since shut businesses and destroyed millions of jobs globally, likely tipping the world economy into recession.
Chinese airlines, along with their global counterparts, have also been hurt by the travel disruptions caused by the pandemic. "The manufacturing sector is now growing at a strong pace, with industrial output rising by 4.8% y/y [year-on-year] in June", Rajiv Biswas, chief economist for the Asia Pacific region at research firm IHS Markit, told Al Jazeera.
The economy contracted 1.6 percent year-on-year in the first six months, the bureau said, while the urban unemployment rate dipped to 5.7 percent last month, from 5.9 percent a month earlier.
In seasonally adjusted terms, GDP rose 11.5% quarter-on-quarter following a 10% decline the first quarter, taking GDP back above the pre-coronavirus high hit in the fourth quarter of previous year.
Economists expect the monetary policy to gradually return to normal in the second half of the year while the overall policy stance will remain supportive and flexible as the country continues to face uncertainties from overseas markets and policymakers are still gauging the impact of the floods in the southern parts of the country on the economic recovery.
Zhuang said a recovery of about 5 percent in the next two quarters is "definitely foreseeable". Still, the result is far below the 6% level recorded for the four quarters of 2019.
The growth is also credited to the government's $500 billion fiscal-spending programme, tax relief measures and cuts to interest rates. But consumer spending is weak due to public unease about possible job losses.
Fixed asset investment fell 3.1% in the first half of the year from the same period last year, compared with a forecast 3.3% fall and a 6.3% decline in the first five months of the year.