China’s economic rebound strengthens amid global struggle with Covid-19 crisis

Joanna Estrada
October 20, 2020

However, it warned that "the global environment is still complicated and severe".

"Although Chinese data have to be treated with caution, more reliable data such as those on Western exports to China paint a positive picture: despite some serious long-term problems, China seems to be the only major economy whose GDP apparently exceeds its pre-pandemic level already", said economist Holger Schmieding at Berenberg Bank.

Beijing paved the way for a return to economic growth "in roughly three stages", The Wall Street Journal reports: Shutting down its economy from January through March, firing up its factories starting in April, and - "having nearly entirely stamped out the coronavirus within its borders - encouraging consumers to begin venturing outside of their homes and opening up their wallets".

"China's [third-quarter] GDP data showed that the Chinese economy continues to rebound from the economic shockwaves of the Covid-19 pandemic that hit the economy hard in Q1 2020", Rajiv Biswas, chief Asia Pacific economist at research firm IHS Markit said in an email to Al Jazeera.

"The near-term outlook is for continued improvement in China's economic growth momentum in the last quarter of 2020, helped by improving domestic retail spending and strong export shipments to the United States and Europe for the Christmas season sales", Biswas added.

Industrial production rose 5.8% in just-ended quarter compared to the same period a year ago, a marked improvement over the first half's 1.3% contraction. It said China faced great pressure to prevent a resurgence of the coronavirus.

Authorities have lifted curbs on travel and business, but visitors to government and other public buildings still are checked for fever.

Travellers arriving from overseas must be quarantined for two weeks. That broke a streak of nearly two months with no virus transmissions reported within China.

Retail sales rose 0.9% over a year earlier, up from a 7.2% contraction in the first half, when consumers already anxious about a slowing economy and a tariff war with Washington tightened their belts. Online commerce rose 15.3 percent.

Retail sales grew 3.3 percent in September from a year earlier, speeding up from a modest 0.5 percent rise in August and posting the fastest growth since December 2019.

"China's recovery in private consumption is gathering momentum", said Stephen Innes of AxiCorp in a report.

China has reported 4,634 coronavirus deaths and 85,685 confirmed cases, plus three suspected cases. Those temporarily cut off most access to cities with a total of 60 million people. The IMF expects a 9.8% contraction in France, 6% in Germany and 5.3% in Japan.

China's economy grew 4.9% for the three months between July and September, providing further evidence that the world's second-largest economy is rapidly recovering from the worst of the coronavirus pandemic.

Other reports by Click Lancashire

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