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China grows 4.9% Q3 – but still fell short of expectations

19 Oct 2020 12:10 PM

The pace of China’s economic recovery accelerated in Q3, growing 4.9% year-on-year. This fell short of market expectations of 5.2%, but marked a significant step ahead of Q2’s 3.2% growth.

According to China’s National Bureau of Statistics, the Chinese economy grew 0.7% overall in the first nine months of 2020 compared to the previous year.

Also, Chinese retail sales grew by 3.3% in September after a modest 0.5% rise in August, their fastest growth since December 2019. Industrial production grew by 6.9% in September after growing 5.6% in August.

Investment in fixed assets increased by 0.8% between January and September compared to the previous year, returning to year-on-year growth for the first time in 2020.

The Chinese government has implemented a set of measures in response to the pandemic including more fiscal spending, tax relief, cuts in lending rates and bank reserve requirements.

The IMF has forecast 1.9% growth for China for 2020, which is close to the central bank's forecast of 2%. That would make China the only major economy expected to record growth in 2020, albeit at its slowest annual pace since 1976.

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