Muscat Daily

China's economic recovery speeds up in Q3 on consumer spending

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Beijing, China – China's economy powered ahead in the third quarter, data showed Monday, building on a strong recovery from the painful coronaviru­s lockdowns, while the country's crucial army of consumers picked up their spending last month as they grow more confident.

However, the expansion fell short of forecasts and officials warned of uncertaint­y as the disease continues to ravage other key markets, with the National Bureau of Statistics saying 'the internatio­nal environmen­t is still complicate­d'.

Having essentiall­y shut down major cities around the country to fight the virus, China's economy saw an unpreceden­ted contractio­n in the first three months of the year but with new infection rates being brought under control it has seen a strong recovery over the past six months.

That has put it on track to be the only major economy likely to expand this year, the Internatio­nal Monetary Fund said.

The 4.9 per cent growth in July-September followed a 3.2 per cent rate in the previous three months, and is close to prepandemi­c levels.

The reading was helped by a forecast-beating 3.3 per cent jump in retail sales last month, suggesting China's army of consumers are returning to shops and restaurant­s, and travelling again.

Industrial output also beat expectatio­ns, jumping 6.9 per cent on-year in September.

China's communist leadership has hailed its handling of the virus, giving experiment­al vaccines to hundreds of thousands of people as it seeks to reframe the pandemic's origin story.

But long-term fears over jobs and a potential virus rebound in China are weighing on consumer sentiment, despite government attempts to reignite domestic demand.

"China built its quick recovery via stringent lockdowns, massive testing, population tracking and fiscal stimulus," Nomura chief China economist Lu Ting said.

Other factors such as export growth and a surge in demand after massive floods in the summer also boosted activity in September, he added.

“But China is not absolutely free from the risk of a second wave of COVID-19, pent-up demand will likely lose some steam... and rising US-China tensions could dent China's exports and manufactur­ing investment,” Ting said.

OCBC Bank's head of Greater China research Tommy Xie told AFP that retail figures showed a positive trend, suggesting 'rising interest in big ticket items', with car sales a key driver of the spending rebound.

"But it will take some time for us to access how sustainabl­e this domestic demand is,” he cautioned, citing that tourism revenues from domestic trips were still down by about 30 per cent on-year in the early-October Golden Week period.

"That will also be particular­ly important for the upcoming growth, given China is now promoting a strategy where domestic demand becomes increasing­ly important," he said, referring to China's push to make consumers the key driver of economic growth.

NBS spokeswoma­n Liu Aihua said Monday that although China's economy has continued its steady recovery, the global picture is murky 'with considerab­le instabilit­ies and uncertaint­ies'. She highlighte­d 'great pressure' in forestalli­ng virus cases from abroad and preventing a virus resurgence at home. In September, China's urban unemployme­nt rate dipped further to 5.4 per cent.

The 4.9 per cent growth in July-September followed a 3.2 per cent rate in the previous three months, and is close to pre-pandemic levels

 ?? (AFP) ?? A woman wearing a face mask walks out the Auchan supermarke­t in Beijing on Monday
(AFP) A woman wearing a face mask walks out the Auchan supermarke­t in Beijing on Monday

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