China’s economic growth in the third quarter has aroused great attention from major overseas investment institutions. Relevant agencies believe that the effective policies adopted by the Chinese government in various fields have promoted the strong recovery of the Chinese economy
And that the Chinese economy has become a “bright touch” of the global economy under the impact of the new crown pneumonia epidemic; given that China’s economic growth rate is broadly based, China will continue to maintain it during the year. Steady recovery trend.
Strong growth momentum
Strong growth momentum Arijan Dekhuizen, senior economist at ABN AMRO, said that although economic data in the third quarter were slightly lower than expected, the Chinese economy has clearly taken the lead from the impact of the epidemic at the beginning of the year.
It is worth noting that if the economic growth rate in the second quarter has the base effect of the data decline in the first quarter, then the bright data in the third quarter shows that China’s economic recovery is strong and will continue to maintain a strong growth momentum.
China is the only country in the key economy that ABN AMRO expects to achieve positive growth, and the annual growth rate may remain at about 2%. This is in sharp contrast to the expectations of a 5% and 7.5% contraction in the US and Eurozone economies, respectively.
DBS Bank also compared the differences in economic recovery paths between China and other major economies in related reports. After comparing the recovery path of the Chinese and American economies, DBS believes that although the economies of China and the United States are in a recovery cycle, the recovery paths of the two are obviously different.
China’s growth is mainly based on industrial production and exports, and domestic consumption still has further growth potential. The recovery in the United States is mainly based on the rebound in retail data, and industrial output is relatively lagging.
China’s economy is expected to grow by 2% within the year, while the US will still experience a contraction of about 4% even under strong fiscal and monetary policies. The root cause of the difference in the recovery path between the two is the success or failure of epidemic control.
Effective epidemic prevention and control
ABN AMRO believes that successfully controlling the epidemic quickly and successfully is the key to the reason why the Chinese economy has quickly emerged from the impact of the epidemic. This is the result of the combined effect of effective control policies, social governance models, and developed infrastructure.
The Chinese government has more medical supplies reserves, better disposal plans and community management models. China’s previous successful experience in dealing with large-scale epidemics also played an important role.
Although there were sporadic cases in China in the later period, the overall affected area was controlled to a very small scale. Therefore, although the epidemic has had a certain impact on some regions, it has not shaken China’s overall macroeconomic recovery.
ABN AMRO also stated that another reason why the Chinese economy stands out is that the government’s economic policies are effective and precise.
In Western economies, most economic stimulus policies are concentrated on the demand side, and the Chinese government has concentrated stimulus policies on the supply side.
This allows China to restore its supply capacity to the global market faster than other countries. As the global epidemic has caused a surge in demand for home office equipment and medical products, the rapid restart of China’s supply capacity has contributed greatly to the rapid economic recovery.
The rebound will continue
The sustainability of China’s economic recovery momentum has also become the focus of attention of all parties. Based on economic data in the third quarter, all parties believe that China’s economic recovery is based on a broader range.
DBS Bank released a report stating that China’s GDP growth rate reached 4.9% in the third quarter, indicating that while other countries are still striving to recover from the impact of the epidemic, China has further freed itself from the negative impact of the epidemic.
It is worth noting that China’s secondary and tertiary industries have shown steady and steady recovery. Forward-looking data from oil refining, steel and other sectors indicate that the secondary industry will continue to recover, and the recovery of small and medium-sized enterprises in the secondary industry is also encouraging.
The PMI of small and medium-sized enterprises has risen into the expansion range for the first time since June. High-frequency data from the tertiary industry show that the process of economic normalization will continue.
In particular, China’s “Eleventh” Golden Week data show that as the situation of epidemic control improves and the labor market improves, the recovery of China’s domestic consumption will continue in the future.
Some analysts believe that compared with the positive impact of industrial output and exports on economic data in the third quarter, the contribution of China’s domestic consumption is slightly weaker.
Since the beginning of this year, the growth of household consumption has been weak, lagging behind the overall economic growth. However, as the epidemic is gradually brought under control, restrictions on travel are gradually relaxed, and consumer confidence is improving.
China’s economy has come out of the bottom of the first quarter, and residents’ income growth is also accelerating.
Based on the “11” Golden Week data, JPMorgan Chase Private Bank believes that some preliminary data show that both domestic tourism and optional consumption have rebounded significantly.
Although there is still a certain degree of crowd control in various places, the strong rebound data shows that consumer confidence has been improving.
With the overall improvement of the economy, the growth rate of household consumption will rise from the current 4% to 6% at the end of the year. The scissors gap between industry and services will be further reduced.
UBS Wealth Management Investment Director Office believes that China’s rapid economic recovery has set an encouraging benchmark for other economies in the world.
The continuous rebound of China’s economy was evident in the third quarter and has a broader foundation. Although the retail consumption data in the third quarter still has certain deficiencies, the data of the “Eleventh”
Golden Week show that the consumer confidence of Chinese consumers is constantly improving.
It is precisely based on the above positive data that all parties are optimistic about China’s continued strong economic rebound during the year. Citi Wealth Management stated that China’s economic growth rate has returned to a positive growth zone. In September, industrial and consumption growth rates both rose to highs during the year.
It is expected that GDP will continue to pick up in the fourth quarter without changing. Compared with other parts of the world, it is a foregone conclusion that China’s economy will lead the world during the year. Citi expects China’s fourth quarter GDP or year-on-year growth of 2.4%, and China’s GDP for the whole year or year-on-year growth of 2.1%.
