China’s Economy Receives a Major Boost from Retail Shoppers
China is recovering more from the ongoing historic slump of the global economy as more shoppers flock the market for domestic purchases.
China’s recovery for the past four months has been impressive given the circumstances. Consumers are now taking recovery a now notch higher with increased retail sales which rose to 3.36 trillion Yuan, representing a 0.5% increment from 2019.
While the growth is small, Chinese authorities are happy with the progress. That marks the first time in 2020 that retail sales have recorded gains.
According to Fu Linghui, the Spokesman for National Bureau of Statistics, the stabilizing job market in China and loosened travel restrictions motivated people to go out and spend.
China is the only major economy poised to expect growth in 2020. Thus, increased news of further recovery sets China further apart from the fate of the rest of the world.
Developed Countries like the US, Canada, the UK Germany, France, Japan and Italy already recorded dramatic contractions in the first half 2020. The performance has left, little to no room for notable growth for the rest of the year and even beyond.
The International Monetary Fund has estimated that China as the best performing economy of 2020 will record a growth of only 1%.
“The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated. Moreover, the recovery projected to be more gradual than previously forecast.”
China Is Approaching Recovery with Caution
The IMF further stated that the damages to economies has so far proven to be higher than previously estimated. As the global gross product in 2021 is expected to grow by only 5.4%.
“In 2021 global growth sees projections at 5.4%. Overall, this would leave 2021 GDP some 6.5% points lower than in the pre-covid-19 projections of January 2020.”
In China, the economy of 14 trillion contracted by 6.8% in the worst performance of its recorded history since 1992. In the second quarter, China was among the first countries to contain the spread of coronavirus. And then gradually move on to reopening some parts of its economy. This move saw China grow by 3.2% at a time when other economies shrank by double digits.
The second quarter data pointed that China’s retail sector was weak. This was due to reduced spenditure and people unwilling to leave their homes in fear of catching the coronavirus.
Ticket and cars sales have particularly increased with majority of spending coming from wealthier individuals, with the data anticipating more broadening.
China Is Expecting More Growth
China had earlier reported growth in its industrial production, at 5.6% slightly lower than the expected growth, outing it behind July’s 5.7% performance. The positive economic news stems from several of its sectors, set to expand in the fourth quarter.
The chief economist of for Greater China Iris Pang, stated that the growth has brought more jobs into the market.
“This is indeed the internal growth circulation that China is promoting.” Added Pang.
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