The world’s second-largest economy continued its strong Economic Recovery in the third quarter of the year, as figures released from Beijing on Monday showed Gross domestic product (GDP) grew 4.9% in July-September from the same time last year.
Despite being lower than the 5.2% expected by analysts, the figures represent a remarkable turnaround for the Chinese economy.
The first quarter of 2020 saw China react to the coronavirus by shutting down factories and manufacturing plants nationwide. The result was China’s economy contracted by 6.8% and was the first time the Chinese economy contracted since China started recording quarterly figures in 1992.
Underpinning the Chinese Economic Recovery has been the robust (or draconian) reaction to the pandemic. Strict measures of containment have enabled ‘normal life’ to resume which has resulted in increased consumer spending.
Chinese Retail sales grew 3.3% year-on-year in September, surpassing expectations for a 1.8% increase. September’s retail sales figures were also a considerable leap from the 0.5% growth recorded in August.
Earlier in the year, the Chinese Central Bank stepped in to support growth and employment after economic activity was severely restricted. However, after recording 3.2% growth in the second quarter of 2020, China’s Central Bank has more recently held off on further stimulus measures.
Other areas of the Chinese economy that highlight the strong rebound can be found in property and, importantly, exports. In the property sector, investment increased 12% in September from the same time last year, the fastest rate in almost 1.5 years.
Exports, a key component of the Chinese GDP grew 9.9% in September from a year before whilst imports rose 13.3%, suggesting robust economic activity.
Whilst the EU struggles to deal with the pandemic and declining economic conditions, and the US deals with the election-induced volatility, it is worth keeping a close eye on China to see where exactly this rebound could take them.
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