China economic recovery on fast track as factory activity revives

The consumers returned to shopping malls and major trading partners reopened for business in the third quarter shaking off the earlier slump

China’s economic recovery stepped up in the third quarter as industrial activity revived thanks to the stimulus provided by the government. The 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.

Foreign direct investment (FDI) into China jumped 25.1% in September from a year earlier, to 99.03 billion yuan ($14.79 billion), the commerce ministry said on Friday. In the January-September period, FDI rose 5.2% year on year to 718.81 billion yuan.

Policymakers globally are pinning their hopes on a robust recovery in China to help restart demand as economies struggle with heavy lockdowns and the 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.