October Sees China’s Economy Pick Up Speed, With Manufacturing and Retail Surging

According to the government on Wednesday, China’s economy showed further indications of recovery in October as manufacturing and retail sales increased, despite the slowdown in the real estate market.

October saw a 4.6% increase in factory production compared to the same month last year, while retail sales increased 7.6% due to strong spending over the week-long National Day vacations.

However, real estate investment fell 9.3%, and authorities admitted that the sector was still “in the midst of adjustment” after the industry’s collapse due to the pandemic and a crackdown on developers’ excessive borrowing two years before.

The pandemic’s effects on travel, manufacturing, transportation, and almost every other facet of life came to an end over a year ago when China’s officials abandoned its “zero-COVID” rules, which were meant to stop infections.

Therefore, better economic figures from October also show slower growth rates from a year ago. Overall, China’s economy recovery has been erratic, but lately, activity has picked up, prompting many analysts to raise their growth forecasts for this year over the government’s objective of about 5%.

China’s GDP contracted in the summer as the world lost interest in its exports and the country’s real estate market continued to worsen. According to official figures, the economy grew at an annual rate of 4.9% between July and September, above economists’ projections of around 4.5%. However, compared to the 6.3% annual growth rate of the prior quarter, it was much slower.

Recent data indicates that the second-largest economy in the world is once again expanding, and this comes just before President Xi Jinping and U.S. President Joe Biden are scheduled to meet later on Wednesday in California for a Pacific Rim meeting.

Liu Aihua, a National Bureau of Statistics spokesman, briefed reporters in Beijing and emphasized again and again that China was moving toward new growth models as part of a decades-long shift away from rapid industrialization and large investments in factories, ports, and other infrastructure in favor of a more sustainable pace of growth driven by consumer spending.

Despite “wave-like development and tortuous progress” throughout the recovery, the economy was still improving under “effective” measures, he added. “Right now, there’s still a lot of external pressure, a lot of domestic demand constraints, a lot of production and operation challenges for enterprises, and a lot of attention is needed to address hidden risks in certain fields,” Liu said.

According to the research, consumer spending has become a more significant factor in driving development. over January to October, consumption contributed 83.2% of economic growth, an increase of 6% over the same period the previous year. There’s a lot of space for development, considering the disparity in wealth between rural and urban residents, according to Liu.

The automotive sector is unique. Sales of passenger cars increased 10.2% in October compared to the same month last year as manufacturers increased their marketing efforts and buyers chose hybrid and electric automobiles. The China Passenger Car Association released a study this week showing that exports of passenger vehicles increased 66% this year to little over 3 million units, up almost 50% to 391,000 units in October.

However, he conceded that employment is still a problem and that Chinese households have little discretionary income.

In October, the general unemployment rate stayed at 5%. Once the rate of unemployment for young people exceeded 20%, the government ceased disclosing the data months ago.

Updates on the problem will be provided “at an appropriate time,” according to Liu, who also said that the Statistics Bureau and other pertinent agencies were looking into the matter and trying to enhance data collecting.