China’s economy Kovid-19 moves away from global recession as shopkeepers join recovery

The world’s second largest economy has been in recovery mode for months. Now, consumers are starting to spend more, boosting retail sales to 3.36 trillion yuan ($ 495 billion) in August, an increase of 0.5% over the previous year. While smaller, profits have increased sales for the first time in 2020.

Chinese officials confirmed this at a monthly press conference on Tuesday, and told that the country is seeing economic recovery elsewhere.

“The job market has stabilized, and the travel ban has come loose,” said Fu Linghui, spokesman for the National Bureau of Statistics. “People are more willing to come out and spend.”

China’s recovery makes it an outlier as the rest of the world weighs on the epidemic.

The world’s top economies – Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States – have shrunk dramatically in the first half of 2020. China was the only country for which the International Monetary Fund had projected growth this year for the June forecast – a 1% increase is expected.

Careful recovery

China’s economy is bouncing back since the first quarter of the $ 14 trillion economy fell 6.8% in the first quarter, the worst period of three months since China began publishing quarterly figures in 1992.

The country managed to face a slump and grew by 3.2% in the second quarter as other major economies posted massive contractions. But that data showed signs of weakness – particularly in the retail sector, suggesting that Beijing was still a difficult time when people were convinced to move out of their homes.
It is changing now. Fu reported that China’s box office is recovering as officials allowed theaters to reopen in mid-July, with August ticket sales down more than half compared to a year earlier. Movie theaters were closed for several months before the epidemic.
Meanwhile, car sales rose about 12% in August from a year earlier – a sign that government efforts to encourage car purchases by handing over cash may work. The sale of residential property was also promoted.

Economists at Capital Economics wrote in a Tuesday research paper, “Rapid increases in car and property sales among wealthier consumers make it clear that spending is up, though they saw data suggesting that recovery should be broader Has been. ”

Signs of growth

Tuesday’s data showed other positive signs. Industrial production and capital expenditure were raised in August, while the unemployment rate was 5.6% lower in August compared to 5.6% in August.

“This growth has brought some jobs back to the market,” Greater China chief economist Iris Pang said in a research note.

“This is exactly the internal growth circulation that China is promoting,” he said, adding that Beijing’s recent focus on reducing demand and increasing its tensions with the West reduced its dependence on foreign trade, capital and technology Trying to do.

The country still faces challenges. The unemployment rate still exceeds historical levels, and Beijing figures do not include people from rural communities or a significant number of hundreds of millions of migrant workers.

Even government spokesman Fu said on Tuesday that the country still faces “large unemployment pressures” as the number of new college graduates is entering the job market. He said that many of those people had trouble finding jobs due to the epidemic.