China’s economy grew by 4.9 percent in the third quarter of the year compared to the same quarter in 2019, to mark a significant recovery from the plunge of COVID-19.
The economy recorded a 1.7 percent increase compared to the 3.2 percent growth the South Asian country recorded in the second quarter of the year, according to the data published by the National Bureau of Statistics (NBS) on Monday.
China was the foremost in reopening businesses after prolonged lockdowns aimed at curtailing the spread of coronavirus. The world’s second largest economy set on the path of recovery as local authorities gradually ease restrictions and allow factories and businesses to reopen.
The economy had contracted by 6.8 percent in the first quarter of the year, marking its official contraction since the end of Cultural Revolution in 1976.
“Year-on-year growth was up from 3.2 percent in quarter two, showing that the economic recovery from COVID-19 continues, led by strength in industry driven by robust investment and exports,” said Louis Kuijs, head of Asia economics at Oxford Economics. “But GDP growth was lower than our forecast of 5.3 percent year on year, reflecting slowing infrastructure investment growth and lingering softness in corporate investment and consumption.”
The NBS data noted key areas of the economy that yielded the growth, including export which rose above Bloomberg’s projection.
Industrial production, a gauge of activity in the manufacturing, mining and utilities sectors, grew by 6.9 percent in September from the past year following a 5.6 percent rise in August. That’s 1.1 percent increase above the 5.8 percent estimated by Bloomberg.
The NBS reported that retails’ sales as a key measurement of consumer spending, contributed to the growth as it recorded 3.3 percent rise to improve its August 0.5 percent increase, and beat the 1.7 percent projected by Bloomberg.
Retails recorded its first expansion in August this year, following improved consumer spending that beat other areas of the economy. The third quarter results indicate momentous spending and increase in importation. According to data published by China’s Custom last month, imports rise 13.2 percent in September compared to the same quarter last year. The increase means inbound shipments went up to an all-time high of $203 billion.
Another sector, fixed-asset investment, a gauge of spending on infrastructure, property, machinery and equipment, rose by 0.8 percent in September, indicating an increase from 0.3 percent plunge in the previous months of the year. It’s the sector’s first record of growth in nine months.
The surveyed urban jobless rate was down from the peak of 6.2 percent in February and 5.6 percent in August to 5.4 percent in August.
SCMP reported that the Chinese government has set a target of creating 9 million new urban jobs in 2020, 2 million less than the 2019 target, and maintaining a surveyed urban unemployment rate around 6 percent, compared with 5.5 percent last year. China created 13.52 million new urban jobs in 2019, beating its 11 million target.
However, the report indicated that the surveyed urban jobs do not represent the entire unemployment situation in China, as it excludes millions of migrant workers.
China has managed to remerge from the ravages of the pandemic to surprisingly beat economics projections. Last week, the International Monetary Fund (IMF), said the world’s most populous country’s economy will grow by 1.9 percent this year, trumping its earlier forecast in June by 0.9 percent, and making China the only G20 economy with a positive economic estimate.
Premier Li Keqiang had said at the National People’s Congress in May that China will not set an economic growth target this year, according to SCMP. But China’s central bank governor said Yi Gang said the economy will grow by about 2 percent in 2020.
“I think the accumulative growth for the first three quarters of this year will be positive… for the whole year; we predict China GDP growth of around 2 percent.
“The Chinese economy remains resilient with great potential. Continued recovery is anticipated, which will benefit the global recovery,” Yi said.
The IMF’s World Economic Outlook estimated that the global economy will contract by 4.4 percent this year – more favorable than the 4.9 percent decline it had forecasted in June. The 2021 growth is expected to yield 5.2 percent rebound, or 0.2 percentage points lower than June’s estimate.
The adjustments in June’s forecast figures are mainly as a result of the rebound in China’s economy. With the US and Europe still battling with coronavirus and counting on vaccines, China leads the global economy with the gains from its re-emerging sectors.