Growth regains strength in China

China experienced a growth acceleration just as most of the major economies were weighed down by the Covid-19 pandemic. GDP jumped 4.9% in the third quarter announced Monday the National Bureau of Statistics (SNB). Although questionable, China’s official GDP figure is still under scrutiny given the country’s weight in the global economy. China, where the virus appeared in December before spreading to the whole planet, appears as a barometer of the hoped-for recovery of the global economy. The Asian giant is the first country to have relaunched its activity, thanks to “strict confinements, large-scale screening tests and monitoring of contact cases”, notes analyst Ting Lu, of the bank of Nomura business. In the midst of a pandemic and while the virus had almost brought the country to a halt, growth in the first quarter had an all-time low (-6.8% over one year). GDP then rebounded in the second quarter (+ 3.2%), thanks to a marked improvement in sanitary conditions. In the coming months, the Chinese economy “will continue to gain strength”, driven in particular by domestic consumption and the end-of-year celebrations, which are generally favorable to exports, believes analyst Rajiv Biswas, of the IHS Markit firm. In September, retail sales and industrial production were at their highest level since the start of the year. But the export sector, a pillar of the Chinese economy, remains particularly vulnerable at a time when Beijing’s main trading partners, especially the European Union, face a new wave of contamination. And China, itself, “is absolutely not immune to a new wave,” warns Mr. Lu. After the discovery of a mini-outbreak of coronavirus, the metropolis of Qingdao (east) has carried out in disaster last week the screening of more than 10 million people. On the employment front, the unemployment rate, measured in China only in urban areas, stood in September at 5.4% against 5.6% the previous month. However, this figure excludes the millions of migrant workers, weakened by the pandemic. China is expected to be the only major economy to show positive growth this year. Last week, the International Monetary Fund (IMF) virtually doubled its forecast for economic growth for China in 2020 to 1.9%, citing a “faster-than-expected return to normal.”

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