China’s long-delayed economic data showed a mixed recovery in the third quarter, with unemployment rising and retail sales weakening in September despite a pick-up in growth.
Gross domestic product grew 3.9 percent from a year ago in July-September, recovering from near-stagnant growth in the second quarter, when Shanghai was still under lockdown. The figure was stronger than the average estimate of 3.3 percent in a Bloomberg survey of economists.
The data was delayed for nearly a week as the country held its 20th party congress – a major political event in which President Xi Jinping secured a third term as head of the ruling Communist Party and consolidated his power.
Monthly indicators for September gave a weaker picture. After four months of declines, the unemployment rate rose from 5.3 percent in August to 5.5 percent in September. Retail sales growth slowed to 2.5 percent, compared to the 5.4 percent increase in August and well below the estimated 3 percent.
Industrial production rose 6.3 percent in September from a year earlier, surpassing the 4.2 percent increase in August and better than economists’ forecast of 4.8 percent. Fixed asset investments increased by 5.9 percent in the first nine months of the year, mainly in line with expectations.
According to Raymond Yeung, chief economist for Greater China at Australia & New Zealand Banking Group Ltd, the data was “slightly surprising on the upside”, thanks in large part to the manufacturing sector. focus on “cautious and focused” efforts.
The benchmark CSI 300 index fell as much as 1 percent, after a 0.5 percent increase earlier. The onshore yuan fell 0.3 percent to 7.2487 per dollar.
The economy “overcame” the negative impact of “multiple unexpected shocks,” the NBS said in a statement accompanying the data, adding that key indicators “have recovered and stabilized to remain within reasonable ranges.”
The country also released trade data on Monday showing export growth slowing in September. US dollar exports rose 5.7 percent last month from a year earlier, from 7.1 percent in August, while imports grew 0.3 percent, unchanged from the previous month. That data was also delayed during the party congress.
What Bloomberg Economics Says…
The slowdown in Chinese export growth in September adds to evidence that global demand is declining. Things could get worse in the fourth quarter, with the global outlook weakening, meaning bleak prospects for Chinese exports. The declining buffer of exports – a key growth crutch during the pandemic – is making the economy more vulnerable to the real estate crisis and Covid Zero restrictions.
Eric Zhu, Chinese economist
China is trying to spark a recovery as the third quarter was threatened by a few smaller Covid outbreaks across the country, resulting in mobility restrictions and weakening consumer and business confidence.
Speaking after the congress, Xi said China’s economy is “resilient” and pledged to deepen economic ties with other countries.
“China cannot develop in isolation from the world. The development of the world also needs China,” Xi told an audience of Chinese and foreign journalists.
The economy has come under enormous pressure as economists forecast growth of just 3.3 percent for the whole of 2022 – far below an official target of about 5.5 percent set earlier this year. Officials began to downplay that goal in recent months when it fell out of reach, focusing instead on job stability and other metrics.
–With help from James Mayger.
(Except for the headline, this story has not been edited by DailyExpertNews staff and has been published from a syndicated feed.)