China’s economy is expected to regain steam in the fourth quarter with the government’s effective measures to coordinate Covid control and economic development along with stimulus policy measures gradually taking effect, economists and analysts said. They said the recovery trend in industrial production will likely continue for the remainder of the year, and expect to see a gradual improvement in key economic indicators, including investment and consumption. Their comments came after key economic data released by the National Bureau of Statistics (NBS) showed China’s economy has maintained a recovery trend in October, with steady growth in industrial production and investment, while consumption was still weak amid pressure from renewed Covid-19 outbreaks.
The NBS said China’s value-added industrial output grew 5% in October from a year earlier after a 6.3% rise in September. Fixed-asset investment (FAI) increased 5.8% in the January-October period, compared with a 5.9% rise in the first three quarters. NBS Spokesman Fu Linghui said that China’s economy has sustained recovery momentum despite facing pressure from the increasingly complex and challenging global environment and frequent Covid-19 outbreaks at home. Fu said China’s steady economic performance in 2022 has showcased the strong resilience of the economy, and growth will continue to recover in the future, supported by improved domestic demand.
Lou Feipeng, Senior Economist at Postal Savings Bank of China, said new growth drivers have played a key role in boosting steady economic growth in October. The NBS said value-added industrial output from high-tech manufacturing grew 10.6% year-on-year in October, 1.3 percentage points higher compared to the previous month. Investment in high-tech industries jumped 20.5% in the first 10 months.
Zhou Maohua, Analyst at China Everbright Bank, attributed the steady growth in industrial production to continued recovery in domestic demand, a series of stimulus policies taking effect and resilience in foreign trade. Zhou said the drop in retail sales is mainly due to renewed Covid-19 outbreaks, saying consumption will likely improve amid more precise Covid-19 containment and intensified efforts to expand domestic demand and stabilize growth. The NBS said China’s retail sales declined by 0.5% year-on-year in October, after the 2.5% year-on-year growth in September, the China Daily reports.