As economies across the world struggle, China make a economic turnaround
COVID-19 pandemic has led to shifts in the world economy and has pushed China even more to the forefront. The country has recovered from the COVID-19 pandemic impacted the economy in the third quarter but missed forecast.
According to the National Bureau of Statistics (NBS), the Gross domestic product (GDP) of China grew 4.9% in July-September from a year earlier. The growth is slower than the 5.2% forecast by analysts in a Reuters poll and following a 3.2% growth in the second quarter.
The National Bureau of Statistics (NBS) said that the world’s largest economy grew 0.7 percent in the first nine months from a year earlier.
As economies around the globe struggle to cope up with the coronavirus pandemic which is now causing a second wave of infections, everyone looks up to China to restore the demand.
China has made a comeback from a decade of low growth in the first few months of the year due to the coronavirus pandemic. Several recent updates about the economy have pointed out that the country is having a broader upturn in consumption in the third quarter.
China’s economy on a quarter-on-quarter basis GDP rose 2.7% in July-September according to the bureau report. Previously, it was expected that the growth would be 3.2 percent rise and there was an 11.5 percent rise in the previous quarter.
Industrial output grew by 6.9 percent in September from a year earlier. It saw a 5.6 percent rise in August. Retail sale, which saw a 0.5 percent rise in August, also hike up to a 3.3 percent rise in September.
After a 0.3 percent dip in the first eight months, fixed-asset investment went up by 0.8 percent in the first nine months from a year earlier.
The Chinese government also has announced a bunch of measures to tackle COVID-19 shock. They included more fiscal spending, tax relief, and cuts in lending rates and banks’ reserve requirements to revive the coronavirus-hit economy.
The central bank also stepped up policy support earlier this year when the coronavirus pandemic first broke out causing travel restrictions and having a hard impact on the economy. Recently, they have held off on further easing.
The International Monetary Fund projected a growth of 1.9 percent by China in 2020. This makes China the only major economy in the world with a growth in 2020.
The proportion of worldwide growth coming from China is also expected to increase. According to Bloomberg calculations with the help of International Monetary Fund data, the worldwide growth coming from China will go up from 26.8 percent in 2021 to 27.7 percent in 2025, which is more than 15 and 17 percentage points. This would be higher than the US share of global output.
Gita Gopinath, IMF’s director of research, wrote in the report, “While the global economy is coming back, the ascent will likely be long, uneven, and uncertain.”
China’s central bank governor Yi Gang said on Sunday that their economy would expand by about 2% this year as it has got the coronavirus pandemic under control.
Yi said, “I think the accumulative growth for the first three quarters of this year will be positive … For the whole year, we predict China’s GDP growth of around 2 percent.”
He also added, “Monetary policy should focus on domestic demand, domestic inflation targeting … and let the market decide the exchange rate.”
Yi also said that the Chinese currency has seen appreciation against the US dollar in recent times.