China’s growth picks up in Q3 as recovery takes hold

China’s economic growth accelerated to 4.9% over a year earlier in the latest quarter as a shaky recovery from the coronavirus pandemic gathered strength.

Figures announced Monday for the three months ending in September were in line with expectations after the ruling Communist Party declared the outbreak under control in March and began reopening factories, shops and offices.

Factory output rose, boosted by foreign demand for Chinese-made masks and other medical supplies. Retail sales, which had lagged behind the manufacturing rebound, finally returned to pre-virus levels.

The economy “continued the steady recovery,” the National Bureau of Statistics said in a report. However, it warned, “the international environment is still complicated and severe.” It said China still faces “great pressure” to prevent a resurgence of the virus.

China, where the pandemic began in December, became the first major economy to return to growth with a 3.2% expansion in the quarter ending in June. Output contracted 6.8% in the first quarter after Beijing shut down the world’s second-largest economy.

Authorities have lifted curbs on travel and business but visitors to government and other public buildings still are checked for the virus’s telltale fever. Travellers arriving from abroad must be quarantined for two weeks.

Last week, more than 10 million people were tested for the virus in the eastern port of Qingdao after 12 cases were found there. That broke a streak of almost two months with no virus transmissions reported within China.

Industrial production rose 5.8% over the same quarter last year, the National Bureau of Statistics reported, a marked improvement over the first half’s 1.3% contraction.

Chinese exporters have benefited from the economy’s relatively early reopening and global demand for masks and other medical supplies. They are taking market share from foreign competitors that still are hampered by anti-virus controls.

Retail sales returned to positive territory in the latest quarter, rising 0.9% over a year earlier.

That was up from a 7.2% contraction in the first two quarters as consumers, already anxious about a slowing economy and a tariff war with Washington, put off buying. In a sign demand is accelerating, sales in September rose 3.3%.

China has reported 4,634 coronavirus deaths and 85,685 confirmed cases, as well as three suspected cases.

Economists say China is likely to recover faster than some other major economies due to the ruling party’s decision to impose the most intensive anti-disease measures in history. Those temporarily cut off most access to cities with a total of 60 million people.

Private sector analysts say as much as 30% of the urban workforce, or as many as 130 million people, may have lost their jobs at least temporarily. They say as many as 25 million jobs might be lost for good this year.

The ruling party promised in May to spend $280 billion on meeting goals including creating 9 million new jobs. But it has avoided joining the United States and Japan in rolling out stimulus packages of $1 trillion or more due to concern about adding to already high Chinese debt.

Joe McDonald, The Associated Press

Joe McDonald is a reporter with The Associated Press,  an American not-for-profit news agency headquartered in New York City and founded in 1846.