Left Menu
Development News Edition

WRAPUP 2-China's Aug industrial output accelerates, retail sales turn up in boost to recovery

China's industrial output growth accelerated in August, while retail sales expanded for the first time this year, suggesting the economic recovery is gathering pace as demand starts to improve more broadly from the coronavirus crisis. An annual decline in fixed-asset investment over January-August also moderated due to government stimulus efforts.

Reuters | Updated: 15-09-2020 08:21 IST | Created: 15-09-2020 08:21 IST
WRAPUP 2-China's Aug industrial output accelerates, retail sales turn up in boost to recovery

China's industrial output growth accelerated in August, while retail sales expanded for the first time this year, suggesting the economic recovery is gathering pace as demand starts to improve more broadly from the coronavirus crisis.

An annual decline in fixed-asset investment over January-August also moderated due to government stimulus efforts. After the pandemic paralysed huge swathes of the economy, China's recovery has been gaining momentum as pent-up demand, government stimulus and surprisingly resilient exports propel a rebound.

"We think that China’s economic recovery is on a reasonably firm footing now and should continue through Q4 and into 2021, with solid investment growth, gradually recovering consumption momentum and resilient exports," said Louis Kuijs at Oxford Economics. Industrial output growth quickened to 5.6% in August from a year earlier, the fastest gain in eight months, data from the National Statistics Bureau showed on Tuesday. Analysts polled by Reuters had expected a 5.1% rise from 4.8% in July.

Retail sales also rose 0.5% on-year, snapping a seven-month downturn and beating analysts' forecast for zero growth. It July, sales dropped 1.1%. Consumer confidence has been picking up lately, from spending on automobiles and duty-free shopping.

Auto sales rose 11.8% in August from a year earlier while sales of telecoms products jumped 25.1% y/y, the data showed. Fixed-asset investment fell 0.3% in January-August from the same period last year, compared with a forecast 0.4% slide and a 1.6% decline in the first seven months of the year.

Private sector fixed-asset investment, which accounts for 60% of total investment, fell 2.8% in January-August, compared with a 5.7% decline in the first seven months of the year. Recent economic indicators ranging from trade to producer prices and factory activity all suggested a further pick up in the industrial sector, and the broader economy.

Government stimulus has been a powerful domestic driver, while momentum has also been supported by Beijing's largely successful efforts to get the virus under control. "Fiscal and monetary policy stimulus should continue to support the recovery. But we expect the impact of policy stimulus to lose some punch with credit growth easing in Q4," Oxford Economics' Kuijs said.

Data last week showed China's August exports marking the strongest annual gain since March 2019, as more of its trading partners eased coronavirus lockdowns. Factory gate prices also fell at their slowest annual pace in five months last month. Some analysts fear that the recovery could stall, hurt by rising tensions between Washington and Beijing, which many expect could escalate ahead of the U.S. presidential election in November.

China also is looking to reduce its reliance on overseas markets for its development as U.S. hostility and the pandemic increase external risks that could hamper longer-term progress. Moreover, the possibility of another wave of local infections in the winter, and the continued rise in the number of COVID-19 cases across a number of countries, led by India and the United States, have many investors nervous about the outlook.


TRENDING

OPINION / BLOG / INTERVIEW

Uganda COVID-19 response: Was off to a good start but reopening dwindled prospects

Uganda has shown success in using health information to enhance efficiency of disease surveillance, reporting and monitoring. The success, however, has critical challenges confronting it as the country resumes normal activities....

New farm bills in India: Focusing on farms or farmers?

... ...

Kenya’s COVID-19 response: Chaos amid lack of information

Confusing numbers and scanty information on how effective curfews and lockdowns have been in breaking transmission have amplified coordination and planning challenges in Kenyas response to COVID-19. Without accurate data, it is impossible t...

Farkhad Akhmedov: Calculating the price of impunity from the law

In insistences such as the battle over the Luna, Akhmedov has resorted to extreme legal machinations to subvert the High Courts decision and keep his assets from being seized. ...

Videos

Latest News

U.S. appeals court upends Minnesota plan to extend deadline for receiving ballots

A federal appeals court on Thursday said Minnesotas plan to count absentee ballots received after Election Day was illegal, siding with Republicans in the battleground state. In a 2-1 decision, the U.S. 8th Circuit Court of Appeals said the...

Ex-embassy worker suspected of sexually assaulting 24 women

A former US embassy worker in Mexico is believed to have drugged and sexually assaulted as many as two dozen women, filming many of them while they were unconscious, according to federal prosecutors. Brian Jeffrey Raymond was arrested earli...

Our govt provided 6 lakh jobs in 15 years: Nitish Kumar

Bihar Chief Minister Nitish Kumar on Thursday said that his government provided over 6 lakh jobs during its 15-year regime as compared to 95,000 people getting jobs during the RJD regime from 1990 to 2005. They RJD were in power for 15 year...

US OKs extradition of 2 nabbed in ex-Nissan boss' escape

The US State Department has agreed to turn over to Japan two American men accused of smuggling former Nissan Motor Co Chairman Carlos Ghosn out of the country while he was awaiting trial, the mens lawyers said in court documents Thursday. A...

Give Feedback