November 27, 2020

China confirms its recovery after the coronavirus by growing 4.9 percent in the third quarter

Correspondent in Beijing



With the coronavirus under control since before the summer, the Chinese economy continues to recover as the pandemic continues to hit the rest of the world and marks record numbers of infections in Europe. During the third trimester, China’s Gross Domestic Product (GDP) grew 4.9 percent with respect to the same period of the previous year, as announced this Monday by the National Bureau of Statistics. This rise is higher than the 3.2 percent recorded during the second quarter, but less than the 5.2 percent predicted by Reuters agency analysts. Averaging the 6.8 percent drop suffered during the first quarter due to the paralysis of the country after the outbreak of the epidemic in Wuhan in January, the Asian giant returns to the path of positive growth in these nine months: 1.6 %.

In its forecasts for this year, the International Monetary Fund (IMF) estimates that China will be the only major economy on the planet to grow. It is expected to be around 1.9 percent, an insufficient figure for the size of this country but enviable for Western powers, whose recovery is being hampered by the worsening of the pandemic during this fall. Analyzed by quarter, Chinese GDP rose 2.7 percent in the third from the second, when it rebounded 11.5 percent compared to the plunge in the first. As shown in the graph of this variable, the V that indicates the economic recovery is about to complete its upward stretch.

Broken down, China’s GDP shows a number of positive factors that invite hope. As reported by the state news agency Xinhua, industrial production grew 6.9 year-on-year percent, up from 5.6 percent in August, and its value added 5.8 percent. For its part, investment in fixed assets also grew by 0.8 percent in these nine months, thus reversing the fall of 0.3 percent that marked until August.

Even more positive is the improvement in retail sales, a key factor in consumption that determines the confidence of society. Due to the uncertainties caused by the pandemic, this variable has been the last to recover because the Chinese, already savers by nature, had reduced your expenses for fear of the future. Revealing a turnaround that began in August, when they finally posted a positive value and rose 0.5 percent year-on-year, retail sales grew 3.3 percent in the third quarter.

According to official data, the urban unemployment stood at 5.4 percent in September, two tenths less than the previous month. But the real unemployment figures are calculated higher by the millions of rural emigrants who have had to return to their villages due to the impact of the pandemic on factories and services in large cities.

To return to growth, the Beijing regime has implemented a battery of measures, such as increasing public spending, reducing fiscal pressure and incentivize bank loans. Thanks to the control of the epidemic, China already breathes an astonishing normality, as was verified with the more than 600 million displacements that took place earlier this month during the National Day holidays and the Mid-Autumn Festival, when the monuments and restaurants were filled with tourists again.

But the authorities do not throw the bells to the flight and the prime minister, Li Keqiang, warned earlier this month of the challenges that await China’s economy, which is facing an increasingly hostile international scenario due to the global impact of the pandemic and the deterioration of its image.

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