China reports 4.9% GDP growth for the third quarter of 2020, according to data published by the National Bureau of Statistics.
The figure was up 4.9% from a year ago, making the growth for the first three quarters of 2020 to 0.7% from a year ago.
Economists predict that China GDP growth of 5.2% in the third quarter, based on an average of estimates gathered by Wind Information, a financial information database.
“Generally speaking, the overall national economy continued the steady recovery and significant results have been delivered in coordinating epidemic prevention and development,” the bureau announced in an English-language release.
“However, we should also be aware that the international environment is still complicated and severe with considerable instabilities and uncertainties, and that we are under great pressure of forestalling epidemic transmissions from abroad and its resurgence at home. The economy is still in the process of recovery and the foundation for sustained recovery needs to be consolidated," the statement read.
Retail sales increased by 3.3% in September, for a 0.9% increase in the third quarter. Retail sales contracted 7.2% for the first nine months of the year. Meanwhile, fixed-asset investment grew 0.8% in the first three quarters of the year.
Industrial production saw a 6.9% increase in September from a year ago, bringing the total growth for the first nine months of the year to 1.2%.
Official estimates revealed that China’s gross domestic product contracted 6.8% in the first three months of the year. GDP rose by 3.2% in the second quarter. According to the International Monetary Fund, China will be the only major world economy to grow this year, at 1.9%.
Two-pronged growth
However, Leland Miller, the CEO of research firm China Beige Book, describes China’s economic recovery as "two-pronged."
He also pointed out that the recovery is not evenly happening throughout the economy.
“The recovery itself is actually two-pronged, and you see the larger cities, you see the coastal regions doing much, much better than the rest of the country,” he said during an interview on CNBC.
“So, there’s really two recoveries going on — Beijing wants to advertise the Beijing, Shanghai, Guangdong type of recovery, but that’s not most of China,” he stressed.
“If you look at what’s happening in the credit markets too, a lot of these firms, services in particular, but also retail, others, are not borrowing as much as you would think that they would,” he said.
Meanwhile, he noted that small and medium-sized businesses are borrowing a lot less than they were in the second quarter.
“That’s not what should happen. When you’re coming out of a coronavirus stoppage or slowdown, we should be seeing a lot more borrowing. Since we’re not, you got to question what firms are seeing that’s making them hesitate,” Miller said.
In September, British economist Jim O’Neill said that China’s recovery from the coronavirus crisis is accelerating and is positioned to drive global GDP.
The former chief economist at Goldman Sachs explained that the recent Chinese consumer spending data indicated the speed of China’s economic recovery.
“I suspect Chinese GDP growth could actually end 2020 as net positive still,” O’Neill said during an interview with CNBC. “By end 2021, Chinese GDP growth will have possibly even made up for, not only the losses but the loss in the trend also.”
