The Chinese economy has continued to show stronger recovery from the COVID-19 pandemic, as its economy saw growth of 4.9% between July and September – Q3 2020, compared to the same quarter last year. However, the figure is lower than the 5.2% projected by most international economists.
China is now leading the charge for a global recovery based on its latest Gross Domestic Product (GDP) data. The near 5% growth is a far cry from the slump the Chinese economy suffered at the start of 2020 when the pandemic first emerged.
China’s trade figures for September also pointed to a stronger recovery, with exports growing by 9.9% and imports growing by 13.2% compared to September last year.
It appears to be a broadening recovery with the important services sector rebounding. Domestic tourists and travelers have probably helped the recovery continue by spending their money at home because global restrictions mean they can’t yet go abroad. With international travel severely restricted, millions of Chinese have been traveling and spending domestically.
What you should know
- While the COVID-19 pandemic has hampered the year’s growth targets, China remains in a trade war with the US and it has relatively hurt its economy.
- For the first three months of the year, China’s economy shrank by 6.8% when it saw nationwide shutdowns of factories and manufacturing plants. It was the first time China’s economy contracted since it started recording quarterly figures in 1992.
- Over the previous two decades, China had seen an average economic growth rate of about 9%; although, the pace has gradually been slowing.
- There were 637m trips in China over the eight-day holiday which generated revenue of 466.6bn RMB ($69.6bn, £53.8bn), according to data from its Ministry of Culture and Tourism.
- Duty-free sales in the tropical island province of Hainan more than doubled from last year, soaring by nearly 150% according to the local customs data.
What they are saying
According to Iris Pang, Chief China Economist for ING in Hong Kong, “I don’t think the headline number is bad. Job creation in China is quite stable which creates more consumption.”
According to Robin Brant, BBC China correspondent, “China’s economy continues to grow at rates unimaginable in other Covid-hit countries. Draconian lockdown measures to control the virus combined with some government stimulus appeared to have worked well. While the growth of 4.9% is slightly below some forecasts, industrial output – a good barometer of state-controlled activity, came in above expectations”
According to Yoshikiyo Shimamine, Chief Economist at the Dai-Ichi Life Research Institute in Tokyo, “China’s economy remains on the recovery path, driven by a rebound in exports, but we cannot say it has completely shaken off the drag caused by the coronavirus.”