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China's economy is likely to continue leading the global recovery and
achieve a GDP growth close to the pre-COVID-19 level in the year's
fourth quarter, after expanding by 4.9 perp in the third, experts
said on Monday. The growth of the world's second-largest economy turned positive,
hitting 0.7 perp year-on-year, in the first three quarters, after a
1.6 perp slide in the first half, the National Bureau of Statistics
said on Monday. "The Chinese economy posted a continuous recovery in the first nine
months and achieved significant results in coordinating development with
epidemic prevention," said Liu Aihua, an NBS spokeswoman. "The recovery in domestic demand was strong, especially on the
consumption front," Liu said, adding that a largely stable epidemic
situation has restored consumers' confidence in offline and services
consumption. Retail sales growth turned positive for the first time this year in
the past quarter, coming in at 0.9 perp year-on-year, the bureau
said. Investment also recovered as supportive policies for enterprises like
tax relief took effect, it said, with fixed-asset investment growing
0.8 perp from January to September, versus a 3.1 perp slide in the
first six months. The NBS also reported that the country registered 6.9 perp
industrial output growth in September, compared with 5.6 perp in
August. Multiple factors are expected to help sustain the recovery into the
fourth quarter, Liu said, such as the recovery in demand, the
improvement in corporate confidence and profitability and a more
balanced resumption of production. Experts said growth may accelerate to more than 5 perp
year-on-year, close to the pre-pandemic level of about 6 perp in the
fourth quarter, as consumption further recovers with pent-up demand
while infrastructure and corporate investments speed up. Lu Ting, chief China economist at Nomura Securities, said services
and retail sales are likely to further recover while
infrastructure-linked investment will pick up speed with more government
spending, leading to some predictions of fourth-quarter growth of 5.7
perp. Wang Jun, a senior researcher at the China Center for International
Economic Exchanges in Beijing, said China's timely macroeconomic
policies strongly support stability in key areas such as employment and
foreign trade. Surveyed urban unemployment nationwide stabilized to 5.4 perp in
September, compared with 5.6 perp in August, according to the NBS.
The total value of imports and exports in goods rose by 0.7 perp in
the first three quarters, in positive territory for the first time this
year. "All these factors helped anchor a positive expectation for future
development of the Chinese economy," Wang said at the forum hosted by
China News Service on Monday, adding that the economy should grow around
5 to 5.5 perp in the fourth quarter. According to the International Monetary Fund, China's economy is set
to be the only major economy showing positive growth in 2020 and grow by
1.9 perp annually. Based on the IMF forecast, China's share in the world GDP may
increase to 14.5 perp this year, up 0.9 perpage points from last
year, said Wu Chaoming, deputy dean of Hunan province-based Chasing
Securities' Chasing Institute. Experts, however, said external uncertainties and the risk of a
COVID-19 resurgence domestically remain, calling on policymakers to
maintain the strength of macroeconomic supports instead of rushing to
roll back the stimuli. "The economy is still in the process of recovery, and the foundation
for sustained recovery needs to be consolidated," said Liu of the NBS,
adding that many economic indicators remain negative. Lu from Nomura Securities said one should not be "over-optimistic",
given remaining obstacles like the global pandemic situation and
tensions between the world's two biggest economies. Zhao Xijun, a finance professor at Renmin University of China in
Beijing, said monetary policy should be more flexible and targeted to
balance short-term priorities and long-term goals, while reforms should
deepen to enable market forces to have a greater say in resource
allocation.
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