Third quarter GDP growth shows China successfully navigating the headwinds

In a hard-won result, China’s gross domestic product grew 4.9 percent year-on-year in the third quarter, 0.2 percent higher than the previous quarter, the National Bureau of Statistics said on Monday.

As expected, since the Chinese economy rebounded sharply from the impacts of the COVID-19 pandemic in the third quarter of last year setting a higher base, this was a dip in the year-onyear quarterly growth rate from the 18.3 percent in the first quarter and the 7.9 percent in the second. And it was in line with forecasts that had been lowered in light of the economic pressure that China is now facing, such as from the dramatic rise in the prices of raw materials and energy, and supply chain disruptions.

No wonder the Purchasing Managers Index fell below the 50-percent threshold to 49.6 percent in September, 0.5 percentage points lower than the previous month, the first time since the outbreak of the novel coronavirus.

Also, while the decoupling efforts of the United States and the attritional tariffs it has imposed on Chinese imports have become a new normal, they are still taking their toll, and floods and other natural disasters caused by extreme weather events in the summer have also dragged down the GDP growth.

Yet most of the major macroeconomic indexes remain within a reasonable range, and all the fundamentals of the national economy — ranging from people’s disposable income and employment to the country’s international payment balance — are still stable thanks to the series of policies the central authorities have carried out to cushion the external influences and stabilize domestic growth.

That the PMI of high-tech manufacturing hit 54 percent last month, 0.3 percentage points higher than that of August, indicates the industrial upgrading is still underway and the backbone drivers of the economy are emerging stronger from the aforementioned tests.

With investment steadily increasing, production expanding, price hikes and debt risks being effectively checked, the uptick of the service industry and consumption — the total retail sales of consumer goods grew 4.4 percent in September yearon-year, 1.9 percentage points higher than that of the previous month — demonstrates the economy is developing on the right track.

In the face of the continuing uncertainties at home and abroad, it is predicable that China’s macro policies will become more targeted, more preemptive and more flexible to adapt to the changes so as to keep the economy operating within a reasonable range, and ensure its recovery is sustainable and balanced.

The high-quality development paradigm China seeks to implement cannot be realized without policymakers constantly demonstrating their ability to respond to challenges so as to overcome the difficulties, manage the risks and address the uncertainties.