By Gabriel Crossley
BEIJING (Reuters) – China’s economic recovery likely stepped up in the third quarter as consumers returned to shopping malls and major trading partners reopened for business, shaking off the record slump seen earlier this year.
The world’s second-largest economy is expected to have grown 5.2% in July-September from a year earlier, faster than the second quarter’s 3.2%, according to a Reuters poll.
Policymakers globally are pinning their hopes on a robust recovery in China to help restart demand as economies struggle with heavy lockdowns and a second wave of coronavirus infections.
“China has become the first major economy to return to its pre-virus growth path, thanks to its rapid containment of COVID-19 and effective stimulus response,” said analysts from Capital Economics. However, they warned a renewed slowdown is likely from late 2021 as stimulus fades.
China’s retail spending has lagged the comeback in factory activity as heavy job losses and persistent worries about infection kept consumers at home, even as restrictions lifted.
However, that is expected to have changed in the third quarter.
In September, auto sales marked a sixth straight month of gains with a solid 12.8% growth. Ford Motor Co’s China vehicle sales jumped 25% in the September quarter from a year earlier.
Domestic passenger flights in September, meanwhile, beat their COVID-19 levels, indicating that sector was approaching a full recovery.
The COVID-19 pandemic, which caused China’s first contraction since at least 1992 in the first quarter, is now largely under control, although there has been a small resurgence of cases in the eastern province of Shandong.
Year-on-year forecasts by 51 analysts polled by Reuters ranged from 2.5% to 7.2%.
On a quarterly basis, GDP is expected to have grown 3.2% in July-September compared with a rise of 11.5% in the previous quarter.
The government has rolled out a raft of measures, including more fiscal spending, tax relief and cuts in lending rates and banks’ reserve requirements to revive the virus-hit economy and support employment.
China releases third-quarter GDP data on Monday (0200 GMT), along with September factory output, retail sales and fixed-asset investment.
Analysts polled by Reuters expect industrial output to grow 5.8% in September from a year earlier, quickening from a 5.6% rise in August, while retail sales were seen rising 1.8%, versus a 0.5% rise in August.
POLICY SUPPORT
While the central bank stepped up policy support earlier this year after widespread travel restrictions choked economic activity, it has more recently held off on further easing.
“Because of the ongoing growth recovery but still strong headwinds, we expect Beijing to maintain its ‘wait-and-see’ policy approach through the remainder of this year,” said analysts at Nomura in a note this week.
The International Monetary Fund has forecast an expansion of 1.9% for China for the full year, the only major economy expected to report growth in 2020.
($1 = 6.7236 Chinese yuan)
(Reporting by Gabriel Crossley; Editing by Sam Holmes)
(Bloomberg) — The head of the International Monetary Fund warned the US that the global economy is closely watching interest rates and industrial policies given the potential spillovers from the world’s biggest economy and reserve currency.
“All eyes are on the US,” Kristalina Georgieva said in an interview on Bloomberg’s Surveillance on Thursday.
The two biggest issues, she said, are “what is going to happen with inflation and interest rates” and “how is the US going to navigate this world of more intrusive government policies.”
The sustained strength of the US dollar is “concerning” for other currencies, particularly the lack of clarity on how long that may last.
“That’s what I hear from countries,” said the leader of the fund, which has about 190 members. “How long will the Fed be stuck with higher interest rates?”
Georgieva was speaking on the sidelines of the IMF and World Bank’s spring meetings in Washington, where policymakers have been debating the impacts of Washington and Beijing’s policies and their geopolitical rivalry.
Read More: A Resilient Global Economy Masks Growing Debt and Inequality
Georgieva said the IMF is optimistic that the conditions will be right for the Federal Reserve to start cutting rates this year.
“The Fed is not yet prepared, and rightly so, to cut,” she said. “How fast? I don’t think we should gear up for a rapid decline in interest rates.”
The IMF chief also repeated her concerns about China devoting too much capital and labor toward export-oriented manufacturing, causing other countries, including the US, to retaliate with protectionist policies.
China Overcapacity
“If China builds overcapacity and pushes exports that create reciprocity of action, then we are in a world of more fragmentation not less, and that ultimately is not good for China,” Georgieva said.
“What I want to see China doing is get serious about reforms, get serious about demand and consumption,” she added.
A number of countries have recently criticized China for what they see as excessive state subsidies for manufacturers, particularly in clean energy sectors, that might flood global markets with cheap goods and threaten competing firms.
US Treasury Secretary Janet Yellen hammered at the theme during a recent trip to China, repeatedly calling on Beijing to shift its economic policy toward stimulating domestic demand.
Chinese officials have acknowledged the risk of overcapacity in some areas, but have largely portrayed the criticism as overblown and hypocritical, coming from countries that are also ramping up clean energy subsidies.
(Updates with additional Georgieva comments from eighth paragraph.)
©2024 Bloomberg L.P.
The head of the International Monetary Fund warned the US that the global economy is closely watching interest rates and industrial policies given the potential spillovers from the world’s biggest economy and reserve currency.
Author of the article:
Published Apr 18, 2024 • 2 minute read
(Bloomberg) — The head of the International Monetary Fund warned the US that the global economy is closely watching interest rates and industrial policies given the potential spillovers from the world’s biggest economy and reserve currency.
“All eyes are on the US,” Kristalina Georgieva said in an interview on Bloomberg’s Surveillance on Thursday.
Article content
The two biggest issues, she said, are “what is going to happen with inflation and interest rates” and “how is the US going to navigate this world of more intrusive government policies.”
Advertisement 2
Article content
The sustained strength of the US dollar is “concerning” for other currencies, particularly the lack of clarity on how long that may last.
“That’s what I hear from countries,” said the leader of the fund, which has about 190 members. “How long will the Fed be stuck with higher interest rates?”
Georgieva was speaking on the sidelines of the IMF and World Bank’s spring meetings in Washington, where policymakers have been debating the impacts of Washington and Beijing’s policies and their geopolitical rivalry.
Read More: A Resilient Global Economy Masks Growing Debt and Inequality
Georgieva said the IMF is optimistic that the conditions will be right for the Federal Reserve to start cutting rates this year.
“The Fed is not yet prepared, and rightly so, to cut,” she said. “How fast? I don’t think we should gear up for a rapid decline in interest rates.”
The IMF chief also repeated her concerns about China devoting too much capital and labor toward export-oriented manufacturing, causing other countries, including the US, to retaliate with protectionist policies.
China Overcapacity
Advertisement 3
Article content
“If China builds overcapacity and pushes exports that create reciprocity of action, then we are in a world of more fragmentation not less, and that ultimately is not good for China,” Georgieva said.
“What I want to see China doing is get serious about reforms, get serious about demand and consumption,” she added.
A number of countries have recently criticized China for what they see as excessive state subsidies for manufacturers, particularly in clean energy sectors, that might flood global markets with cheap goods and threaten competing firms.
US Treasury Secretary Janet Yellen hammered at the theme during a recent trip to China, repeatedly calling on Beijing to shift its economic policy toward stimulating domestic demand.
Chinese officials have acknowledged the risk of overcapacity in some areas, but have largely portrayed the criticism as overblown and hypocritical, coming from countries that are also ramping up clean energy subsidies.
(Updates with additional Georgieva comments from eighth paragraph.)
Article content
[unable to retrieve full-text content]
Poland has EU’s second highest emissions in relation to size of economy Notes From Poland
Source link
Save $700 Off This 4K Projector at Amazon While You Still Can – CNET
UK Mulls New Curbs on Outbound Investment Over Security Risks – BNN Bloomberg
'Kingdom Come: Deliverance II' Revealed In Epic New Trailer And It Looks Incredible – Forbes
Jeremy Hansen – The Canadian Encyclopedia
Auston Matthews denied 70th goal as depleted Leafs lose last regular-season game – Toronto Sun
BC short-term rental rules take effect May 1 – CityNews Vancouver
Benjamin Bergen: Why would anyone invest in Canada now? – National Post
Collection of First Nations art stolen from Gordon Head home – Times Colonist
Comments