China's GDP in the third quarter expanded 4.9 percent year-on-year, causing the economy to bounce back into the positive territory of 0.7 percent growth in first three quarters, according to official data released on Monday, as the country's economic recovery accelerated amid a rebound in domestic consumption, better-than-expected exports and improving investments.
Though GDP growth from July to September missed expectations, China still takes the lead in realizing economic recovery while other countries around the world continue to struggle with COVID-19 and subsequent economic recessions, analysts said.
Because consumers returned to restaurants and shopping malls, and tourists and businessmen hopped on flights and trains, China's retail sales rose 3.3 percent in September year-on-year, widening from 0.5-percent growth in August, according to figures announced by the National Bureau of Statistics (NBS).
Tian Yun, vice director of the Beijing Economic Operation Association, tied the warming consumption to growing confidence in China's epidemic controls and its capacity to deal with coronavirus outbreaks in different cities, which have matured through experience.
"Better-than-expected exports and investments also improved people's income, boosting spending and driving up consumption," Tian told the Global Times.
China's per capita disposable income for the first three quarters reached 23,781 yuan ($3,549) and posted actual growth of 0.6 percent y-o-y, returning to positive growth for the first time this year in the wake of coronavirus impact.
"Unlike the situation of strong production but weak demand in the second quarter, both channels paved the way for strong growth in the third quarter. In particular, domestic demand is speeding up the revival," Liu Xuezhi, an economist at the Bank of Communications, told the Global Times.
However, Gao Liankui, research program director of China and World Economic Governance at Renmin University of China, said that current consumption remains relatively sluggish due to the lack of powerful stimulus measures, underscoring the degree to which China's economic growth now mainly relies on consumer spending.
In addition, consumer inflation slowed in September, so challenges will persist until the end of the year.
"The floods in summer and political impact on global investment and free trade may have dragged China's Q3 GDP growth," Cong Yi, a professor at the Tianjin University of Finance and Economics, told the Global Times on Monday, but added that the statistics are still relatively normal.
"4.9 already shows that China has taken the lead in realizing economic recovery even as the global economy enters recession due to the pandemic," Cong underscored.
On the production end, China's industrial output rose by 5.8 percent in the third quarter on a yearly basis, NBS said. The number followed an outstanding official manufacturing purchasing managers' index, which stood at 51.5 in September, as the world's factory hummed and churned out goods without a break for both domestic needs and overseas demand.
China's exports jumped 10.2 percent year-on-year to 5 trillion yuan in the third quarter, while imports were up 4.3 percent to 3.88 trillion yuan, previous official data showed.
It is the first time for fixed-asset investment to rise 0.8 percent year-on-year from January to September.
The fixed-asset investment in the third quarter was partly boosted by the accelerated recovery of infrastructure investment, as sales of construction machinery such as excavators and heavy-duty trucks rebounded sharply for several consecutive months, said Lian Ping, head of the Zhixin Investment Research Institute.
Industry data from cvworld.cn showed that in September, sales of heavy-duty trucks were estimated at 136,000, an increase of 5 percent month-on-month and 63 percent year-on-year.
Analysts said the economic data for the third quarter will support China to achieve an annual GDP expansion of about 2-3 percent, despite a global recession due to the pandemic.
"As the virus strikes emerging economies that used to send goods to developed countries, some orders are now shifting to China, and this will further support the country's economy," Tian said, adding the trend will continue until next year. He predicted China's GDP will grow by about 6 percent in the fourth quarter and 2-3 percent for the full year.
A report from the Zhixin Investment Research Institute predicted that China's GDP will grow by 7 percent in the fourth quarter, with full-year growth of 2.7-3.3 percent.
However, Tian noted that the job market still poses severe challenges this year, as the COVID-19 outbreak was a blow to the services sector, which provides the majority of jobs for new college graduates.
China reported that its urban unemployment rate stood at 5.4 percent in September, lower than 5.6 percent in August.
In addition, many families borrowed more during the first half of the year, resulting in the ratio of household debt to GDP to continue to rise.
Tian mentioned this as another concern, warning that the trend may continue this year.
"But China will reach its goal of poverty alleviation this year as favorable policies in rural China are strong and many jobs have been created in underdeveloped regions," Tian added.