China’s economic recovery accelerated in the third quarter as consumers shook off their coronavirus caution, although the weaker-than-expected headline growth suggested persistent risks for one of the few drivers of global demand.
Gross domestic product (GDP) grew 4.9% in July-September from a year earlier, official data showed on Monday, slower than the 5.2% forecast by analysts in a Reuters poll but faster than the second quarter’s 3.2% growth.
“China’s economy remains on the recovery path, driven by a rebound in exports. Consumer spending is also headed in the right direction, but we cannot say it has completely shaken off the drag caused by the coronavirus,” said Yoshikiyo Shimamine, chief economist at Dai-ichi Life Research Institute in Tokyo
“There is a risk that the return of lockdowns in Europe and another wave of infections in the United States will hurt consumer spending and trigger more job losses, which would be a negative for China’s economy.”
The weaker-than-expected headline figures weighed on China’s yuan CNY=CFXS and mainland stock benchmarks.SSEC.CSI300 and capped broader market gains in Asia.
The world’s second-largest economy grew 0.7% in the first nine months from a year earlier, the National Bureau of Statistics (NBS) said.
Policymakers globally are pinning their hopes on a robust recovery in China to help restart demand as economies struggle with heavy lockdowns and the second wave of coronavirus infections.
China has partially emerged from a record slump caused by coronavirus shutdowns in the first months of the year.
NBS spokeswoman Liu Aihua warned that growth remained patchy.
“Internally, the economy is still in the process of recovery,” she told a briefing in Beijing. “Some or most of the indicators have not returned to the normal growth level, and some of the cumulative growth rates have also declined.”
On a quarter-on-quarter basis, GDP rose 2.7% in the third quarter, the NBS said, compared with expectations for a 3.2% rise and an 11.5% rise in the previous quarter.