The Chinese economy is the first major economy to recover from the COVID-19 pandemic with a growth of 4.9% from July and September according to government data.
Comparing to analyst expectations, there is a slight drop in the year-on-year expansion, however, they’re also a dramatic reversal from the first quarter of this year when the economy shrunk by 6.8%, it is the first contraction of the Chinese economy since 1992 when officials began keeping quarterly GDP data.
China’s central bank governor Yi Gang said on Sunday that officials predict annual growth of about 2%. “The Chinese economy remains resilient with great potential. Continued recovery is anticipated, which will benefit the global recovery,” he said.
According to the International Monetary Fund, the system of industry and trade around the world is predicted to decline by 4.4% and considered a sharp inclination since the Great Depression. By contrast, China is expected to be the only G20 economy to expand this year.
After the spreading of coronavirus in Wuhan to nationwide and global wide, besides lifting the lockdown, China policymakers released targeted stimulus measures, such as tax cuts and lower interest rates to credit local governments and cheaper lending for businesses.
Most of the schools, offices, enterprises in every corner of Chinese cities have reopened again. Although China does not have any new locally transmitted cases within two months, a new outbreak once again occurs in the eastern Shandong of this country. 4,634 coronavirus deaths and more than 85,000 cases had been officially reported in China.
Comparing to the same period last year, industrial production in September increase by 6.9% according to data illustrated on Monday. Retails sales rose by 3.3%. Auto sales for the month also grew 12.8% while domestic air travel surpassed the level of pre-pandemic. Consumption expenditures have started to enhance one more time, provided by a revival of tourism during a holiday lasting one week which is known as Golden Week.
The fact that losing jobs, unstable growth across the country, household and corporate debt, as well as trade frictions as ties with the US and other trading partners keeping progressively worse, makes the power of China’s economic recovery still remains doubtful. Official economic data is also considered unbelievable and inflated by the local government.
Besides the slight growth and much more tough international environment, the top leader of China is chasing a new challenge known as “dual circulation economy.” Xi Jinping is the person who proposed this concept with the purpose that reducing the country’s reliance on selling in foreign markets and technology and boosting domestic consumption and advances in technology.
“Globalization is facing a reversal, with rising protectionism and unilateralism. The world economy is weakening as international trade and investment, science, technology … security and politics are all undergoing profound change,” Xi said in a speech in Shenzhen last Wednesday.
“We are forming a new development pattern with the domestic economic cycle playing a leading role. Our economy is at a critical period of transformation,” he said.
Despite China’s growth figure had been underestimated, it is clear that the world’s second-biggest economy has been leading the way in the recovery from Covid-19 for some reasons.
In the first three months of the year, China China experienced most of its economic reduction while the last of the world consider the maximum of the pain belongs to the second quarter.
The speed at which China took their action when they admitted that they were facing a tough problem. As other countries, they knew what to do after threat public health and lockdown had great affection.
Cutting down the activities was carried out by measures to soften the economic blow. Public investment aiming to counteract weak private sector Capital expenditures was intensified by China.
via ABC News