China’s economy is picking up as the country continues to dig its way out of the turmoil caused by the coronavirus pandemic.
The world’s second largest economy expanded 4.9% in the July-to-September quarter compared to a year ago, according to government statistics released Monday.
The pace was quicker than the 3.2% increase that China recorded in the second quarter, when it managed to avoid the pandemic-fueled recession that has gripped much of the globe.
But the growth was also a bit weaker than expected: Analysts polled by Refinitiv predicted that China’s economy would expand 5.2%.
“China’s economy continued its rapid rebound last quarter, with the recovery broadening out and becoming less reliant on investment-led stimulus,” wrote Julian Evans-Pritchard, senior China economist for Capital Economics, in a research note.
As much of the world continues to struggle with the virus, China’s recovery has been relatively speedy. The country enforced stringent lockdown and population tracking policies intended to contain the virus, and set aside hundreds of billions of dollars for major infrastructure projects to fuel economic growth.
The economy grew a cumulative 0.7% through the first nine months of this year.”What’s more, the monthly data show that growth was still accelerating heading into Q4,” Evans-Pritchard added.
Industrial production grew 5.8% in the third quarter from a year ago, according to Liu Aihua, a spokeswoman for China’s National Bureau of Statistics.
That’s faster than the second quarter’s 4.4% uptick.The service sector also expanded at a faster pace, up 4.3% this quarter compared with 1.9% in the April-to-June period.
The service sector had been lagging behind other industries earlier this year as partial lockdowns and social distancing policies remained in place, noted Chaoping Zhu, global market strategist at JP Morgan Asset Management. But the more recent recovery signals a “more broad-based growth in the economy,” he added.
Retail sales are also improving — up 0.9% in the third quarter from a year ago, with a 3.3% gain in September alone. And the unemployment rate is dropping: 5.4% in September, compared to 5.6% in August.
“So far we can say consumption has already climbed out from the pandemic’s deep shock,” Liu said at a press conference in Beijing. “The recovery is underway. “She added that more people are “willing to come out from their homes and spend money in the physical shops” as the pandemic has been brought under control.
Asian markets were fairly muted in Monday trade. China’s Shanghai Composite (SHCOM) rose slightly before the GDP announcement, but reversed gains to trade about 0.3% lower.
Hong Kong’s Hang Seng Index (HSI) gained 0.7% — positive, but slightly lower than earlier in the morning.Japan’s Nikkei (N225) rose 1.1% and South Korea’s Kospi (KOSPI) added 0.7%.