Evolving consumption modes, including online shopping, will grow at a faster pace and accelerate economic recovery

China's 3.2 percent economic growth in the second quarter of the year despite the impact of the novel coronavirus pandemic and the fast-changing situation both at home and abroad, especially after GDP shrank 6.8 percent in the first quarter, speaks volumes of the resilience of the Chinese economy.

China's economic performance in the second quarter was beyond the expectations of most economists and market experts of the world. And given the current situation, the Chinese economy is expected to continue the recovery trend into the third and fourth quarters. In particular, the third quarter is likely to see a fairly robust recovery, with the economy expected to stabilize in the fourth quarter. Also, positive growth achieved in the second half of the year is expected to offset the economic losses of the first half. As such, this year will likely see positive growth, even if low.

From the perspective of production, the value added of the primary, secondary and tertiary sectors increased by 3.3 percent, 4.7 percent and 1.9 percent respectively, reversing the downward trend in the first quarter. Among them, the secondary sector saw the most significant recovery, with manufacturing and construction growing significantly and reflecting the sector's strong resilience.

In the tertiary sector, the wholesale and retail trade, transportation, warehousing and postal services, hotel and catering services, that suffered the most due to the pandemic, have recovered to different extents. Although the hotel and catering services' growth remained in negative territory, it rebounded by 17.3 percentage points. These businesses have a large room for growth and therefore can serve as a solid foundation for sustained overall growth in the second half.

As for demand, the Chinese market's performance has been outstanding. Rising consumption has propelled the economic recovery. As China has largely contained the coronavirus outbreak at home, and local governments have adopted various policies and measures according to the situation on the ground to stimulate consumption, people's life is slowly returning to normal.

Although the contribution of consumer demand to GDP in the second quarter was still down 2.3 percentage points year-on-year, the figure narrowed by 2.1 percentage points from the first quarter. Thanks to a favorable fiscal policy and a prudent, flexible monetary policy, rising investments have boosted the economic recovery. Investment, too, grew in the second quarter after a sharp decline in the first quarter. And the demand for net exports, despite a decline in the first quarter, posted positive growth, bolstering GDP growth by 0.5 percentage points.

In addition, the growth in China's per capita nominal disposable income speeded up. In the first half of the year, it increased by 2.4 percent year-on-year, 1.6 percentage points faster than the first quarter. After deducting price factors, per capita real disposable income fell by 1.3 percent, narrowing 2.6 percentage points compared with the first quarter. The decline in the total profits of industrial enterprises above designated size has also narrowed by 23.9 percentage points when compared with the first quarter, despite a 12.8 percent year-on-year drop.

Besides, general public budget revenues fell 10.8 percent year-on-year in the first half, 3.5 percentage points lower than in the first quarter.

Economic decline has been different in different regions even though there wasn't much difference in the pandemic's impact on those regions. An important factor for that was the role of the new economy as a growth driver. Regions that have a relatively high number of new economy companies saw a smaller economic decline, while regions with fewer such companies registered a sharper drop. According to the National Bureau of Statistics, the value added of China's new economy was 16.19 trillion yuan ($2.31 trillion) in 2019, equal to 16.3 percent of the year's GDP.

True, the new economy cannot offset the downward economic pressure due to the decline of the real economy. But the new economy's expansion can boost China's economy and therefore deserves more support.

And despite dealing a heavy blow to all economies, the pandemic has also created opportunities for the development of the new economy represented by new industries, new business forms and new business models, which is reflected in the growth of hi-tech manufacturing, software and information technology services. Other new business models, including online education, working from home, videoconferencing and telemedicine, have also fostered the progress. As such, the new economy will play a crucial role in China's economic recovery.

In the first half, online sales of commodities increased by 14.3 percent, 25.7 percentage points higher than the growth of total retail sales of consumer goods, and as the internet is applied to more sectors, new consumption modes including online shopping and sharing platforms will develop and grow at a faster pace.

More shopping malls, supermarkets, restaurants and other traditional businesses are trying to expand online sales, and more people are getting used to online consumption－and as epidemic prevention and control measures becomes an everyday affair, more and more people will accept new features of consumption, facilitating economic growth.

The new economy will play a significant role in boosting investment too. This year's Government Work Report accorded high priority to new infrastructure and new urbanization initiatives, and major projects to expand domestic demand and accelerate structural adjustments. As for new infrastructure, it can facilitate the growth of the new economy. So there is an urgent need to promote the healthy development of the new economy and new growth drivers such as digital economy to offset the impact of the pandemic, advance economic transformation and realize high-quality development.

The author is a professor of the School of Economics and Management at Tsinghua University and former deputy commissioner at the National Bureau of Statistics. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.