Manila Bulletin

China's economic recovery speeds up in third quarter


BEIJING (AFP) – China's economy powered ahead in the third quarter, data showed Monday, building on a strong recovery from 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 percent growth in July-September followed a 3.2 percent rate in the previous three months, and is close to pre-pandemic levels.

The reading was helped by a forecast-beating 3.3 percent 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 percent 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," Lu 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.

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