China’s Economic Recovery Gathers Steam as Major Indicators Improve Further
China’s economy continued its robust recovery in October as effective novel coronavirus disease (COVID-19) control and government policies to boost demand and consumption led to broad-based improvements in major economic indicators.
Retail sales of consumer goods, the main gauge of China’s consumption, climbed 4.3 percent year on year to 3.86 trillion yuan ($584.5 billion) last month, quickening from the 3.3-percent gain in September, according to data released by the National Bureau of Statistics (NBS) on November 16.
In particular, the catering industry reported a 0.8-percent increase in revenue, the first expansion this year as the hardest-hit sector struggled to recover from the coronavirus impacts.
Fu Linghui, spokesperson for the NBS, attributed the pick-up in consumer spending to the country’s effective epidemic control, increased resident income and pro-consumption policies.
The country’s value-added industrial output edged up 6.9 percent year on year in October, unchanged from that of September, the NBS said, highlighting the contribution of equipment manufacturing, which logged a 10.8-percent increase year on year.
The new-energy vehicles (NEV) sector was a bright spot in equipment manufacturing. NEV output surged 94.1 percent year on year in October as unleashed pent-up demand and supportive policies boosted the auto market.
Other key economic indicators also showed signs of steady economic revival.
Fixed-asset investment went up 1.8 percent year on year in the first 10 months of the year, 1 percentage point higher than the rise in the first nine months.
China’s surveyed unemployment rate in urban areas stood at 5.3 percent in October, 0.1 percentage point lower than that of September.
“The October data mirrored the strong resilience of China’s economy and its ability to recover,” Fu said.
As indicated by the data, imbalances in the economic operation have been adjusted, Fu said, adding that the growth driver is gradually shifting from investment to consumer spending, which will be conducive to developing a more sustained economy.
To cushion the impact of the novel coronavirus disease (COVID-19) epidemic, China has rolled out a raft of measures, including more fiscal spending, tax relief, and cuts in lending rates and banks’ reserve requirements to stabilize growth and employment.
Looking forward, the country has foundations and conditions to sustain economic recovery, including good prospects of consumption, fast growth in industrial output and increased investment, Fu said.
Fu projected China’s economic growth to further accelerate in the fourth quarter compared with that of the previous two quarters, as government measures aimed at supporting enterprises in difficulties and financial policies to bolster the broader real economy will continue to be effective.
However, Wen Bin, chief analyst at China Minsheng Bank, cautioned that China should still be watchful for COVID-19’S reemergence as the global pandemic situation remains grave.
To further consolidate economic recovery, China needs to step up support for key areas, strengthen weak links, and roll out policies to accelerate domestic demand recovery, Wen said.
January-october (% y.o.y.)