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China says its financial system grew three.2% within the second quarter

China reported that the country's GDP grew 3.2% year-over-year in the second quarter of this year – it exceeded analyst expectations and recovered from the contraction in the first quarter.

Lockdowns occurred to curb the Corona virus outbreak in China and when Beijing introduced stimulus measures to support its economy.

Economists surveyed by Reuters anticipated moderate GDP growth of 2.5% in April through June.

China's GDP declined 6.8% year over year in the first quarter of 2020 as the world's second largest economy was severely affected by the corona virus outbreak. This was the country's first decline in GDP since at least 1992 when official quarterly records began.

China's official GDP figures are being tracked as an indicator of the health of the world's second largest economy, but many outside experts have long expressed skepticism about the accuracy of the Chinese reports.

"In general, the economy has gradually overcome the negative effects of the epidemic in the first half of the year and has shown a dynamic of restorative growth and gradual recovery, further demonstrating its resilience and vitality to development," said China's National Statistics Bureau in one Press release on Thursday.

The Chinese government has introduced measures to boost the economy, including budgetary spending and cuts in lending rates and banks' reserve requirements – the amount of cash that lenders must keep in reserve.

Signs of recovery

Current data from China show signs of recovery. Trade figures in June showed that China's dollar-denominated exports and imports rose. Production activity in June also increased compared to May, as two different surveys showed.

Chinese exports have received "massive market shares" while the rest of the world has been blocked, said Bo Zhuang, China's chief economist at TS Lombard, before the data release. China started easing lockdowns earlier than other countries.

Zhuang said he expects China's GDP recovery to be sustainable at least in the next two quarters, given that the domestic economy appears to be "okay" with infrastructure growth and the reopening of travel between provinces, he told CNBCs " Street Signs ".

Zhuang said a recovery of about 5% over the next two quarters is "definitely predictable." China's GDP growth for the full year was 6.1% in 2019.

Challenges remain

However, there is headwind as the outbreak that first occurred in the Chinese city of Wuhan at the end of last year has spread worldwide and, according to the latest data from Johns Hopkins University, has infected more than 13.5 million people worldwide and more than 582,000 people has killed.

China's statistics bureau recognized the risks.

"Given the continued worldwide spread of the epidemic, the evolving enormous impact of the epidemic on the global economy, and the noticeably growing external risks and challenges, the recovery of the economy was still under pressure," the press release said.

The global economy is expected to go into recession this year as many governments around the world have introduced barriers and limited business and social gatherings. The slowdown in global demand growth is likely to affect Chinese exports.

This year, China made a rare decision not to set a GDP target due to the uncertainties surrounding the impact of the pandemic.

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