Recovery to hasten amid retail growth
China sees domestic demand uptick, pre-pandemic industrial output levels
China’s economic recovery is expected to increase its pace and offer stronger support for the world economy in the coming months as signaled by rebounding domestic demand in October, officials and experts said on Nov 16.
They commented after the country’s consumption and investment staged their biggest expansions of the year, while growth of industrial production has recovered to pre-COVID-19 levels.
Retail sales, a key barometer of consumption, grew 4.3 percent year-onyear in October, up from 3.3 percent in September, the National Bureau of the Statistics said on Nov 16.
Fixed-asset investment in the first 10 months rose 1.8 percent, up from 0.8 percent in the January-September period.
The recovery in demand has driven up production, with industrial output rising 6.9 percent year-onyear last month, the same as September and even faster than the 4.7 percent for the same period last year, the bureau said.
Fu Linghui, an NBS spokesman, said the reviving consumer market has helped the economy to recover in a more balanced and sustainable manner. “Economic growth may further accelerate in the fourth quarter of the year compared with the third and second ones,” said Fu.
Despite the rising risk of COVID-19 resurgence in some economies, the country has proved to be capable of containing imported cases while coordinating economic development, Fu said.
After posting 4.9 percent growth in the third quarter, China’s economy should expand by 5 to 6 percent in the fourth quarter and achieve full-year economic growth of about 2 percent, with domestic demand further recovering and exports remaining robust, experts said.
With the epidemic situation largely under control domestically, offline consumption activities and the services sector are set to increase their pace of recovery, said Tang Jianwei, chief researcher at the Financial Research Center of the Bank of Communications.
“The improving employment situation is also brightening household income prospects and boosting consumption demand,” Tang added.
According to the NBS, the surveyed urban jobless rate dropped to a pre-COVID-19 level of 5.3 percent last month. Offline services activity rebounded in October, with catering
revenue nationwide resuming expansion for the first time this year and up 0.8 percent year-on-year.
The resilient domestic market will help anchor the global economy clouded by the pandemic, as China has vowed to take boosting domestic demand and opening its market wider among its priorities in the coming years, experts said.
The country will step up efforts to nurture a strong domestic market and promote win-win international cooperation by virtue of its vast market in the 14th Five-Year Plan (202125) period, said the communique of
the Fifth Plenary Session of the 19th Central Committee of the Communist Party of China.
Huang Qifan, vice-chairman of the China Center for International Economic Exchanges, said the country is expected to continuously increase imports in the period, with total imports in goods likely to surpass $22 trillion over the next decade.
“Such a huge market demand will definitely provide a direct, lasting drive for the global economic recovery,” Huang said at a forum on Nov 15 co-hosted by ICBC International and Caixin.
Despite the improving economic figures, the NBS noted that “multiple challenges” still need to be conquered before full recovery is achieved, as difficulties remained for some enterprises and industries such as airlines and entertainment.
Wen Bin, chief researcher at China Minsheng Bank, said the nation should further strengthen policy support for small businesses, manufacturers and hard-hit services enterprises, and remain cautious about a domestic resurgence of COVID-19.