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Consumption emerging from deep shock of COVID

作者:admin 2020-10-20

Consumption emerging from deep shock of COVID

An online influencer hostess promotes sportswear products via livestream in Lianyungang, East China's Jiangsu Province on Tuesday. Since the outbreak of COVID-19 epidemic, the city has been taking advantage of e-commerce opportunities to boost consumption. Photo: cnsphotos

Judging by the trend of continuous recovery, retail sales in China are clearly emerging from the shock brought on by the coronavirus, according to an official with the National Bureau of Statistics (NBS) on Monday, despite the fact that China's GDP growth of 4.9 percent for the July to September quarter missed economists' forecasts.

The third quarter growth saw the world's second-largest economy bouncing back into the positive territory of 0.7 percent growth in first three quarters, according to official data released on Monday. The third quarter growth missed analysts' forecasts, which, according to a Reuters poll, was at 5.2 percent.

Sluggish recovery in consumption was seen as the main reason for the lower-than-expected GDP readings on Monday, after the country posted stronger-than-expected exports last week and fixed-asset investment managed to return to growth territory for the first time this year with an increase of 0.8 percent year-on-year from January to September. 

NBS spokesperson Liu Aihua said that consumption recovery has nevertheless maintained its momentum, citing strong spending during the National Day and Mid-Autumn Festival holidays, the growing revenues of the catering industry, and robust online sales. 

"Retail sales has for the past several months showed good momentum, demonstrating a recovery, and posting positive growth for both August and September," Liu added. 

Liu said the recovery in retail is underlined by recovering brick-and-mortar shop sales, recovery in services spending (including catering and accommodation), and a rebound in sales of big-ticket spending such as jewelry, cars and cosmetics. 

China's third quarter GDP reading falling short means China's fourth quarter GDP growth has to increase about 5 percent to match the IMF's latest forecast of a 1.9 percent annual growth rate for China in 2020, according to a Global Times calculation.

In the first three quarters, consumption dragged down GDP growth by 2.5 percentage points, whereas investment and exports contributed 3.1 percentage points and 0.1 percentage points respectively, according to the NBS.  However, in the third quarter, consumption contributed 1.7 percentage points of GDP growth.

Retail sales rose 3.3 percent to about 3.53 trillion yuan ($526.7 billion) in September year-on-year, after returning to growth in August for the first time this year, NBS data showed.

A continued recovery in retail and consumption in China's enormous market is of great benefit to the Chinese economy, which is in the process of building the new economic development pattern of "dual circulation" as well as the recovery of the world economy, Liu said. 

"Consumption growth is more resilient compared with exports and investment and the COVID19's impact won't impede growth in consumption for too long," says Cong Yi, a professor at the Tianjin University of Finance and Economics. "This is especially true as China has basically got the epidemic under control."

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Posted in: ECONOMY

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