China's economy grows 4.9% in Q3
By Michele Maatouk
Date: Monday 19 Oct 2020
(Sharecast News) - China's economy continued to recover in the third quarter, albeit a little less than expected.
According to figures released by the National Bureau of Statistics, the economy expanded by 4.9% on the year, up from 3.2% growth in the second quarter and a big turnaround form the 6.8% contraction recorded in the first quarter of the year.
Although the figures were a miss, with economists expecting a 5.2% increase, they still make China the only major economy to post growth for the first nine months of 2020.
The National Bureau of Statistics said: "Generally speaking, the overall national economy continued the steady recovery and significant results have been delivered in coordinating epidemic prevention and development."
However, it also warned that China was "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," it added.
Figures also showed that Chinese retail sales rose 3.3% on the year in September, up from 0.5% growth the month before and versus expectations of 1.8% growth.
Industrial production rose 6.9% on the year in September, up from 5.6% in August and compared to expectations of a 5.8% increase.
Danske Bank noted that while growth was lower than the consensus forecast, equity markets did not seem to take much notice and closed only slightly lower, also taking into account the strong retail sales and industrial production numbers.
"Especially the former are important for a further recovery, as the Chinese consumer year-to-date has spent some 9% less compared to the same period last year. Overall the economy seems to stay on the road to recovery, which is crucial for the global economic outlook as well."
Hussein Sayed, chief market strategist at FXTM, said the industrial production data "should make China more appealing to investors as fundamentals are catching up with stock market performance, while most major economies still have a tough road ahead towards full recovery".
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