According to data from the National Bureau of Statistics of HCina, the country has managed to stage a recovery from the economic impact of the novel coronavirus pandemic during the third quarter.
A year on year GDP growth of 4.9 per cent was reported for the third quarter by the second largest economy of the world. Now the growth for the first three quarters stands at 0.7 per cent year on year.
According to an average of estimates compiled by Wind Information, a financial information database, a GDP growth rate of 5.2 per cent was expected by in the third quarter by Chinese economists.
One of the dampers for growth was the slow recovery in Chinese consumption even in the face of uncertainty about how other countries would manage to control the pandemic and themselves return to growth path.
“Generally speaking, the overall national economy continued the steady recovery and significant results have been delivered in coordinating epidemic prevention and development,” the bureau said in an English-language release.
“However, we should also be aware that the international environment is still complicated and severe,” the release said, “with considerable instabilities and uncertainties, and that we are under great pressure of forestalling epidemic transmissions from abroad and its resurgence at home. The economy is still in the process of recovery and the foundation for sustained recovery needs to be consolidated.”
According to analysts, recovery of consumption will largely dictate the path for future recovery.
In September, there was a 3.3 per cent growth in retail sales for a total of 0.9 per cent growth from the entire third quarter till September. A contraction of 7.2 per cent in retail sales was reported for the first nine months of the year.
There was however a growth of 15.3 per cent year on year in online sales of goods during those three quarters which accounted for 24.3 per cent of total retail sales.
“China’s return to economic dynamism with a faster-than-peers pace is the first step towards a global recovery,” Bruce Pang, head of macro and strategy research at China Renaissance, said in a note.
The efforts of China to increase the contribution of consumption to growth could be affected by issues such as unemployment, diminished household income and shifting consumer behaviour, Pang said while he still expects growth to continue in China.
In the current situation, Chinese authorities might instead be more inclined to depend on investment and exports for overall GDP growth which are uncertain given the high uncertainty about the recovery of the global economy and geopolitical tensions.
Compared to the primary and secondary sectors, there was a much slower recovery in the services, or tertiary, sector of the economy, Pang pointed out. The primary and secondary sectors essentially include agriculture and manufacturing respectively.
(Adapted from CNBC.com)