On October 19th, 2020, according to data released in Beijing, GDP climbed 4.9 % in the third quarter from a year ago.
That’s lower than economists forecast but faster than the 3.2 % expansion seen in the second quarter. Retail sales expanded 3.3 % in September, industrial production grew 6.9 % in the month and investment growth accelerated to 0.8 % in the nine months to the end of the quarter.
Despite the weaker than expected GDP performance, output expanded 0.7 % in the year to date, meaning that the Chinese economy regained all the ground it lost in the first half.
Strong import growth in the third quarter may have dented the GDP number while still being a positive sign for overall output.
“China’s (third-quarter) GDP data showed that the Chinese economy continues to rebound from the economic shockwaves of the Covid-19 pandemic that hit the economy hard in Q1 2020” Rajiv BISWAS, chief Asia Pacific economist at research firm IHS Markit said to Al Jazeera.
“The near-term outlook is for continued improvement in China’s economic growth momentum in the last quarter of 2020, helped by improving domestic retail spending and strong export shipments to the US and Europe for the Christmas season sales” BISWAS added.
The yuan and key stock indices trimmed gains following the weaker-than-expected data, with the benchmark Shanghai index trading 0.6 % higher and the CSI300 index up 0.8 % after rising as much as 1 % and 1.2 %, respectively.
China has been steadily recovering from decades-low growth seen in the first months of the year caused by coronavirus shutdowns.
On a quarter-on-quarter basis, GDP rose 2.7 % in July-September, compared with expectations for a 3.2 % raise and an 11.5 % rise in the previous quarter. Some recent indicators have pointed to a broader upturn in consumption, as well, in the third quarter.
Retail sales grew 3.3 % in September from a year earlier, speeding up from a modest 0.5 % rise in August and posting the fastest growth since December 2019.
Industrial output grew 6.9 % after a 5.6 % rise in August, showing the factory sector’s recovery was also sustaining momentum.
“China’s economy continued its rapid rebound last quarter, with the recovery broadening out and becoming less reliant on investment-led stimulus. What’s more, the monthly data show that growth was still accelerating heading into the fourth quarter” said to Al Jazeera Julian Evans-PRITCHRD senior China economist at research firm Capital Economics.
The Chinese government has rolled out a series of measures this year, including more fiscal spending, tax relief, and cuts in lending rates and banks’ reserve requirements to revive the coronavirus-hit economy and support employment.
The International Monetary Fund has forecast an expansion of 1.9 % for China for the full year, the only large economy expected to report growth in 2020.
Li KEQUIANG the PM warned earlier in October that China needs to make arduous efforts to achieve its full-year economic goals, citing a complex domestic and foreign environment.
China’s retail spending has lagged behind the comeback in factory activity as heavy job losses and persistent worries about infections keep consumers at home, even as restrictions lifted.
“China is supporting the world in a different way from what it did after 2008. A slowing economy means it could not afford another stimulus in 2020. Instead, it did its job by serving as the ‘supplier of last resort.” said Shen JIANGUANG, chief economist of e-commerce giant, JD.com.
Central bank Governor Yi GANG said on Sunday that China has “pro-active fiscal policy” and “an accommodative monetary policy to support the economy.”
“Right now, China has basically put Covid-19 under control,” Mr. Yi said in a webinar organized by the Group of 30. “In general, the Chinese economy remains resilient with great potential. Continued recovery is anticipated which will benefit the global economy.”
Analysis of International Monetary Fund data shows the proportion of worldwide growth coming from China is expected to increase from 26.8 % in 2021 to 27.7 % in 2025.
The coronavirus pandemic, which caused China’s first contraction since 1992 in the first quarter, is now largely under control, although there has been a small resurgence of cases in the eastern province of Shandong.
This article was edited using the data from Aljazeera.com, 247newsaroundtheworld.com, Japantimes.co.jp, Thenationalnews.com, bnnbloomberg.ca, and Wikimedia.org.