China’s economic growth accelerated to 4.9% from a year earlier in the latest quarter as an unstable recovery from the coronavirus pandemic strengthened. Factory output increased, driven by global demand for masks and other medical supplies, while retail spending returned to pre-virus levels for the first time, government data showed.
The recovery is “broadening and becoming less dependent” on government stimulus, Julian Evans-Pritchard of Capital Economics said in a report, saying that data shows growth “is still accelerating” this quarter.
China, where the pandemic began in December, became the first major economy to grow again after the ruling Communist Party declared the disease under control in March and began reopening factories, shops and offices.
The world’s second-largest economy expanded 3.2% from a year earlier in the three months ending in June, recovering from the 6.8% contraction in the previous quarter, its worst performance since at least the middle of the decade. 1960.
The economy “continued the steady recovery,” the National Statistics Office said in a report. However, he warned, “the international environment is still complicated and severe.” He said China still faces “great pressure” to prevent a resurgence of the virus.
Authorities have lifted restrictions on travel and business, but visitors from government and other public buildings are still being screened for the telltale fever of the virus. Travelers arriving from abroad must be quarantined for two weeks.
Last week, more than 10 million people were tested for the virus in the eastern port of Qingdao after 12 cases were found there. That snapped a two-month streak with no reported virus transmissions within China.
The National Statistics Office reported that industrial production rose 5.8% in July-September compared to the same quarter last year, a marked improvement from the 1.3% contraction in the first half.
Retail sales increased 0.9% over the previous year. That was up from a 7.2% contraction in the first half as consumers, already eager for a slowing economy and a tariff war with Washington, postponed purchases.
In a sign that demand is picking up, sales in September rose 3.3%.
“China’s recovery in private consumption is gathering momentum,” AxiCorp’s Stephen Innes said in a report.
China has reported 4,634 coronavirus deaths and 85,685 confirmed cases, as well as three suspected cases.
Economists say China is likely to recover faster than other major economies due to the ruling party’s decision to impose the most intensive disease measures in history. Those temporarily cut off most of access to cities with a total of 60 million people.
Private sector analysts say that up to 30% of the urban workforce, or up to 130 million people, may have lost their jobs at least temporarily. They say that up to 25 million jobs could be permanently lost this year.
The ruling party promised in May to spend $ 280 billion to meet targets, including creating 9 million new jobs. But it has avoided joining the United States and Japan in implementing stimulus packages of $ 1 trillion or more due to concerns about increasing China’s already high debt.
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