High-rises dominate the skyline on both sides of the Huangpu River in Shanghai. (Photo by Gao Erqiang/China Daily)
BEIJING－As the year draws to a close, China’s economic rebound from COVID-19 is gathering pace and boosting hopes for the world’s economic recovery.
Key growth figures in China have all improved. For many market watchers, they represent a boon for the world economy, which is still scrambling to shake off the severest recession in nearly a century.
In the latest World Economic Outlook, the International Monetary Fund projected China’s economy to grow by 1.9 percent this year, 0.9 percentage point above its June forecast, making China the only major economy that will see positive growth this year.
“With the right mix of supportive macroeconomic policies focused on strengthening social safety nets and further key reforms, China will secure the recovery and ensure balanced and high-quality growth, which will benefit China and the world,” said IMF Managing Director Kristalina Georgieva.
A set of early indicators had shown that an across-the-board recovery of the world’s second-largest economy was firmly on track. In November, the purchasing managers index for the manufacturing sector, the main gauge of factory activities, reached 52.1－well above the boom-bust line of 50 and representing the highest level of the year.
Accounting for more than half of China’s GDP growth, the services sector has long been one of its main economic barometers. Last month, the subindex for business activities in the services sector rose to 55.7, also the highest level of the year.
In terms of foreign trade, the revival continued too, as both new export orders and import subindexes hit a year-high and stayed in the expansion territory for three consecutive months.
Some China watchers are concerned that the country’s recovery is unbalanced, with a faster rebound in the industrial sector and declining consumer spending, despite the latter being emphasized by the leadership as a leading driver amid a broader shift toward consumption-oriented growth.
In yet another encouraging sign, the consumption sector rebounded too. In November, China’s retail sales of consumer goods went up by 5 percent yearon-year to 3.95 trillion yuan ($604.2 billion), up from the 4.3 percent gain in October after positive growth in August.
More vigorous consumption recovery became apparent during this year’s Singles Day shopping festival from Nov 1 to Nov 11, which yet again shattered a string of records from total sales volumes to participating brands.
Boosted by the rebound, global chief financial officers have upgraded China’s economic outlook to “modestly improving” for the fourth quarter from “stable “in the third quarter, showed a survey by the CNBC Global CFO Council, which gathers around 150 CFOs of some of the world’s largest companies.
The CFOs responding to the fourth quarter’s survey feel more optimistic about the Chinese economy, the survey said.
At a time when the coronavirus-triggered recession looms large globally, China’s pace of expanding opening-up has been accelerating, generating positive spillover effects on the world’s economic recovery.
China signed the Regional Comprehensive Economic Partnership agreement with 14 other participating countries in mid-November. The world’s largest trade pact will likely open up more sectors and promote business flow among signatories.
It is conducive to boosting regional trade, and the spillover effects of China’s growth will improve the economic recovery of participating countries, according to Steven Zhang, chief economist at Morgan Stanley Huaxin Securities.