China’s Economic Recovery Continues with Improved Indicators
The latest economic data for the first 10 months of the year was released by the National Bureau of Statistics on November 15th, showing continued improvement in various indicators. The total retail sales of consumer goods increased by 6.9% year-on-year, the added value of industrial enterprises above designated size increased by 4.1% year-on-year, and the total import and export of goods increased by 0.03% from a slight decrease of 0.2% year-on-year in the first three quarters. While these figures reflect a positive trend, the need to consolidate the foundation for recovery still remains.
Despite the progress, domestic demand is still insufficient, and more efforts must be made to promote continued economic recovery in the face of a sluggish world economic environment. From a production standpoint, production supply is rising steadily with the added value of industrial enterprises above designated size increasing by 4.6% year-on-year in October. Additionally, the service industry production index increased by 7.7% year-on-year, indicating a positive trend in economic activity.
Consumption continues to play a fundamental role in driving economic growth, with the total retail sales of consumer goods increasing by 7.6% year-on-year in October. The employment situation is generally stable, and new momentum is growing, particularly in new industries and products. From the demand side, the total import and export of goods turned positive with a 0.03% year-on-year increase.
While the economic development situation appears to be recovering, fluctuations in some economic indicators also show that economic recovery is a process of wave-like development and tortuous progress. For example, investment growth has slowed down with national fixed asset investment increasing by 2.9% year-on-year, down 0.2 percentage points from January to September. Additionally, the level of economic prosperity has declined with China’s manufacturing Purchasing Managers Index (PMI) falling to 49.5% in October, down 0.7 percentage points from the previous month.
To address these challenges, the Chinese government is accelerating the implementation of policies and measures to promote economic recovery and growth. This includes optimizing real estate policies, promoting the transformation of urban villages, and issuing an additional 1 trillion yuan of national debt in 2023 to support post-disaster recovery and reconstruction.
The overall economic operation in China continues to recover and the demand for goods and services continues to improve. With the effects of macroeconomic policies being released, the role of improved demand in driving production is expected to enhance the economy’s recovery trend. The Chinese economy has demonstrated resilience and vitality in high-quality development, and the government remains focused on consolidating the foundation for economic recovery.
As the world continues to navigate through the challenges of the ongoing pandemic, China’s economic performance in the first 10 months shows a positive trend and the potential for continued recovery. With various policy arrangements from the central to local governments accelerating their implementation and achieving results, the Chinese economy is expected to continue its recovery trend.