wisepowder: China's Economy Bounces Back As Pandemic Is Brought Under C

wisepowder

China posted 4.9% economic growth in its third quarter compared to the same period last year, keeping it on track to be the only major global economy to record an economic expansion this year in the midst of the novel coronavirus pandemic.To get more China economy news, you can visit shine news official website.

Economists estimate China's yearly GDP growth could be north of 2.5% this year — even as the rest of the world economy is expected to shrink by at least 4%. That differential will give Chinese companies in sectors ranging from electronics to steel more global market share and greater economic influence.

"What you're seeing now is basically China's stability premium kicking back in, in the sense that companies now are dealing with a global pandemic, and many of the places that they would move production to aren't looking so rosy right now," says Michael Hirson, China and Northeast Asia practice head at the consultancy Eurasia Group. Just about half a year ago, China appeared to be in dire economic straits as the pandemic, which began in its port city of Wuhan, caused a national lockdown of staggering scale. In May, Beijing abandoned its annual economic growth targets for the first time ever after its economy shrank 6.8% — the worst contraction in three decades.

"It was like a war. Our director told us, 'In these critical times, if you cannot hold up your end, I'll just find someone else to replace you,' " recounts Xue Yue, vice president at Thinova Magnet Co. Ltd., which makes rare earth magnets and sensors for automobiles and electronics such as smartphones. The pressure to keep supplying Thinova's multinational clients was huge. Xue was able to resume production at Thinova in February by negotiating with dozens of villages to allow some 200 workers out of strict lockdown so they could return to work. But since then, China has staged a dramatic economic recovery due to extensive, mandatory testing and quarantine policies. Daily new cases of the coronavirus have dropped to single digits. Subsequent outbreaks were contained by strict, city-by-city lockdowns that have allowed the national economy to continue operating even as some regions were temporarily sealed off. So factories, including Thinova's, are humming again.

Automobile sales have been growing at their fastest pace in two years. Real estate investment has climbed at double-digit rates for months, trickling down to related sectors such as steel and construction. While China's economic statistics have been dogged by long-running suspicions of their veracity, economists say growth figures — despite not being perfectly accurate — are reliable as a general gauge of activity. "Consumer demand is down, but because of the uncertainty about whether there might be a second wave [of the virus], our clients in North America have been stocking up on our components," says Xue.