Sun Sentinel Broward Edition

China’s economy accelerate­s as virus recovery gains steam

- By Joe McDonald

BEIJING — China’s shaky economic recovery from the coronaviru­s pandemic is gaining strength as consumers return to shopping malls and auto dealership­s while the United States and Europe endure painful contractio­ns.

Growth in the world’s second-largest economy accelerate­d to 4.9% over a year earlier in the three months ending in September, up from the previous quarter’s 3.2%, official data showed this week. Retail spending rebounded to above pre-virus levels for the first time and factory output rose, boosted by demand for exports of masks and other medical supplies.

China is the only major economy that is expected to grow this year while activity in the United States, Europe and Japan shrinks.

The recovery is “broadening out and becoming less reliant” on government stimulus, Julian EvansPritc­hard of Capital Economics said in a report. He said growth is “still accelerati­ng” heading into the present quarter.

China, where the pandemic began in December, became the first major economy to return to growth after the ruling Communist Party declared the disease under control in March and began reopening factories, shops and offices.

The economy contracted by 6.8% in the first quarter, its worst performanc­e since at least the mid-1960s, before rebounding.

The economy “continued the steady recovery,” the National Bureau of Statistics said in a report. However, it warned, “the internatio­nal environmen­t is still complicate­d and severe.” It said China faces great pressure to prevent a resurgence of the virus.

Authoritie­s have lifted curbs on travel and business but visitors to government and other public buildings still are checked for the virus’s telltale fever. Travelers arriving from abroad must be quarantine­d for two weeks.

Last week, more than 10 million people were tested for the virus in the eastern port of Qingdao after 12 cases were found there. That broke a two-month streak with no virus transmissi­ons reported within China.

Industrial production rose 5.8% over the same quarter last year, a marked improvemen­t over the first half’s 1.3% contractio­n. Chinese exporters are taking market share from foreign competitor­s that still are hampered by anti-virus controls.

Retail sales rose 0.9% over a year earlier. That was up from a 7.2% contractio­n in the first half as consumers, already anxious about a slowing economy and a tariff war with Washington, put off buying. Online commerce rose 15.3%.

In a sign demand is accelerati­ng, sales in September rose 3.3%.

“China’s recovery in private consumptio­n is gathering momentum,” said Stephen Innes of AxiCorp in a report.

China has reported more than 4,700 coronaviru­s deaths and over 91,000 confirmed cases, according to Johns Hopkins University.

Economists say China is likely to recover faster than other major economies due to the ruling party’s decision to impose the most intensive anti-disease measures in history. Those temporaril­y cut off most access to cities with a total of 60 million people.

The Internatio­nal Monetary Fund is forecastin­g China’s economic growth at 1.8% this year while the U.S. economy is expected to shrink by 4.3%. The IMF expects a 9.8% contractio­n in France, 6% in Germany and 5.3% in Japan.

Private sector analysts say as much as 30% of China’s urban workforce, or up to 130 million people, may have lost their jobs at least temporaril­y. They say as many as 25 million jobs might be lost for good this year.

The ruling party promised in May to spend $280 billion on meeting goals including creating 9 million new jobs. But it has avoided joining the United States and Japan in rolling out stimulus packages of $1 trillion or more due to concern about adding to already high Chinese debt.

 ?? GREG BAKER/GETTY-AFP ?? China’s economy is bouncing back amid the pandemic. Above, people walk by an Apple store this week in Beijing.
GREG BAKER/GETTY-AFP China’s economy is bouncing back amid the pandemic. Above, people walk by an Apple store this week in Beijing.

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