Economy

China’s economy purrs along in the fast lane amid wreckage of Covid-19

Rising factory output, surging retail sales and a booming auto sector boost Beijing’s numbers

China’s economy continues to purr along as it avoids the global wreckage caused by the Covid-19 crisis.

A raft of data released on December 15 showed that business and consumer sentiment is starting to return to pre-pandemic levels.

The November numbers highlighted a renaissance in manufacturing and retail sales. Fixed-asset investment also accelerated on the back of massive infrastructure spending.

“China’s production and demand continued to rebound steadily in the fourth quarter,” Fu Linghui, a spokesman for the National Bureau of Statistics, said.

The facts:

  • Industrial output jumped 7% in November compared to the same period last year. 
  • Retail sales soared 5% year-on-year and 0.7% higher than the 4.3% increase in October.
  • Auto sales surged by 11.8% in November compared to the same period in 2019.
  • Fixed-asset investment posted growth of  2.6% between January and November compared to the same period last year.
  • That was faster than the 1.8% increase in the first 10 months of 2020.

What the National Bureau of Statistics said: “Economic growth is expected to continue to accelerate compared to the third quarter. In the next stage, China is expected to become the only country with positive growth for the whole year among the world’s major economies.”

Reaction to the news: “We expect output to remain above-trend in the coming quarters, even as tailwinds from stimulus and exports start to ease,” Julian Evans-Pritchard, of Capital Economics, said in a note.

China Factor comment: Tweaking the official economic numbers has tended to resemble a game of Beijing roulette. But this time, the figures appear to add up, with solid consumer demand and strong export growth. How long that will last is the big 2021 question.

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