Beijing: China's economy, which suffered a 6.8 per cent slump in the first quarter due to the coronavirus pandemic -- the worst in 44 years – has bounced back, posting 4.9 per cent growth between July and September, buoyed by the government's sweeping efforts to stimulate demand and consumption.
China was the first to have been hit by the COVID-19 early this year; it is also the first to have recovered while the rest of the world still reels under the pandemic lockdown. This is a clear indication that a fast economic rebound is possible when the virus is brought firmly under control.
The robust performance has brought China almost back on the growth trajectory of roughly 6 % that it was reporting before the pandemic. In fact, if the trend persists, it could widen its lead in the months to come. It has almost no local transmission of the virus now, while the United States and Europe are grappling with a second surge.
According to the New York Times, ‘‘the vigorous expansion of the Chinese economy means that it is set to dominate global growth — accounting for at least 30 percent of the world’s economic growth this year and in the years to come.’’ However, there is a catch. China’s recovery has done less to help the rest of the world than in the past because its imports have not increased nearly as much as its exports. This pattern has created jobs in China but placed a brake on growth elsewhere.
To soften the impact of the COVID-19 shock, the Chinese government has rolled out a raft of measures, including more fiscal spending, tax relief, and cuts in lending rates and banks' reserve requirements to stabilize growth and employment.
But, more important, it spares no effort at contact tracing, at the slightest hint of an outbreak. Even as the epidemic is kept under check, factories and schools have reopened and tourist sites across the country have resumed their usual hustle and bustle, state-run Xinhua news agency said.
The results are fall all to see: The per capita disposable income rose 0.6 per cent in the first nine months, compared with a decline of 1.3 per cent in H1. "This shows the strong resilience and vitality of the economy," Liu Aihua, spokesperson of the NBS, told the media.
Among the bright spots, new growth drivers, including the Internet-powered economy and new infrastructure, have assumed a bigger role in boosting growth, and the contribution of domestic demand is steadily picking up, Liu said.
Monday's data showed consumption pulled up GDP growth by 1.7 percentage points in Q3, compared with a 2.3-per cent drag on growth in Q2.
"The unleashing of the potential of China's super-large market not only demonstrates the country's basic strategy of expanding domestic demand, but will also facilitate the recovery of the entire world economy," Liu said.
Despite the improvements, the foundation for sustainable recovery requires further consolidation due to global uncertainties and uneven performance at home, Liu cautioned.
"Overall, China has the foundation, conditions and confidence to maintain the current trend in Q4 and the full year," Liu added.