After the deep corona crash at the beginning of the year, the Chinese economy continued its strong recovery over the summer months. Annual economic growth accelerated from 3.2 to 4.9 percent in the third quarter and is thus not far off its previous growth path. By the second quarter, China had already restored its pre-crisis level of economic output. For the year as a whole, there are now signs of growth of around two percent compared with 2019. This makes China one of the very few countries that will even achieve a positive growth rate this year compared to the previous year, and once again proves to be the global economic locomotive.
One positive aspect is that the momentum of the recovery has continued until the very end. Both industrial production and the retail trade were able to accelerate their growth significantly in September. The economic climate has recently brightened further. Another positive aspect is that the upturn is becoming increasingly broad-based. While at the beginning of the recovery there was still substantial stimulus from government economic stimulus packages, economic growth has recently become much less dependent on the impetus provided by public investment. Instead, the consumer-related service sectors are now reporting back. They are benefiting from the fact that consumers are putting aside their long-standing corona worries and making up for missed purchases and activities. For example, domestic travel was extremely brisk in the first week of October, the so-called „Golden Week“. These are encouraging signs for economic development in the final quarter.
One of the key pillars of the upturn to date has been exports, which have increased significantly in recent months despite the deep global recession. The high global demand for medical protective equipment, office equipment, and consumer electronics made itself felt here. China’s export industry also benefited from the fact that it was able to resume deliveries earlier than its international competitors, enabling it to gain market share in many sales markets. However, the renewed tightening of corona restrictions worldwide is expected to create some headwind in the coming months. In China itself, however, the epidemic is still under control. Beijing’s strict „zero-case“ policy is now paying off in the normalization of consumption.
The decisive factor for the global economy is that China’s imports are now rising strongly again. Commodity exporters in particular are currently benefiting from the high demand for aluminum, copper and steel. China is once again increasingly importing soy, wheat and liquefied petroleum gas from the USA, while its Asian neighbors are supplying electronic components for the final production of numerous consumer goods. Only the tourist destinations will have to do without the financially strong Chinese tourists for a longer period of time, as China continues to massively seal itself off to protect itself against infection. This will not only affect Asian destinations such as Thailand, Japan and Korea, but also European countries such as France and Italy. For China itself, however, this isolationism could also prove harmful in the long term.