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China's economy to pick up pace in Q3

  • October 19, 2020
    China's economic recovery gathered pace in the third quarter, according
    to an AFP poll of analysts, with consumer spending gradually picking up
    as coronavirus fears eased, helping a wider rebound spurred by
    investment and exports.To get more latest china economy news, you can visit shine news official website.

    in July-September is expected to come in at 5.2 percent when official
    data is released Monday, bringing the world's second-largest economy
    closer to last year's 6.1 percent annual expansion, even as countries
    around the world struggle to contain the deadly pandemic.

    the virus now largely under control in China, most social distancing
    measures have been removed -- and consumers have streamed back into
    restaurants and malls, hopped on flights and trains for domestic
    holidays and packed tourist districts.

    AFP's survey, involving
    analysts from 13 institutions, also forecast full-year growth of 2.3
    percent, slightly above the International Monetary Fund's forecast,
    which tagged China as the only major economy likely to expand this year.

    stimulus has differed from that of much of the region with its focus on
    the industrial sector and construction, rather than for small and
    medium-sized enterprises or direct payments to the unemployed," said
    Moody's Analytics economist Xu Xiaochun.Thus, China's rapid recovery is
    led by goods-producing industries and export shipments."

    Chow of DBS Bank added that the biggest boost came from investments,
    especially those driven by the government, while overseas demand has
    also improved.

    While consumer spending has lagged behind, it is
    catching up "at least among middle- and upper-income households", and
    retail sales are nearing their levels of late 2019, Xu said.But
    economists maintained that growth will be modest and driven mostly by
    production rather than services, adding that lingering uncertainty has
    led to an increase in savings.

    HSBC analysts added in a recent
    report that China's recovery has been "highly uneven", stressing a
    rebound in the private sector will be "essential for a sustainable
    economic recovery".

    Economists warned, however, that a sharp
    rebound is unlikely for Chinese consumer demand given the anxiety
    surrounding the coronavirus, while global tensions are also weighing on
    the external market.Tommy Wu, lead economist at Oxford Economics, said
    analysts are still "waiting for signs of a more significant improvement
    in employment, which will underpin consumption".

    Consumers will
    remain wary about buying large amounts of goods and services during
    economic uncertainty, while "the external market is not likely to help
    the Chinese economy either", said Raphie Hayat, senior economist at

    "China's tensions with several countries are
    increasing, while some of its trading partners are experiencing second
    wave outbreaks of the virus."

    This could boost certain exports
    such as protective equipment and electronics but the effect will "likely
    be more than offset by generally weaker external demand", he added.