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China's upbeat economic recovery offers much-needed hope, optimism

Updated: Oct 19,2020 04:19 PM    Xinhua

BEIJING — China's economic recovery posted an evident acceleration in the third quarter (Q3) among a flurry of key indicators that show an upward trend, underpinned by China's outbreak containment success, strengthening domestic demand and strong foreign trade.

With its gross domestic product (GDP) expanding 4.9 percent year-on-year in Q3, faster than the 3.2-percent growth in the second quarter, China's growth is clearly gathering steam, offering hope and optimism for the world's ailing economy mired in recurrent waves of COVID-19 infections and ensuing lockdowns.

While putting the outbreak under effective control has served as the precondition for a sustained economic recovery, China's new economic development pattern of "dual circulation" has also contributed to the country's swift return to growth.

A raft of effective stimulus measures have spurred domestic demand and investment, as well as supporting employment, including more fiscal spending, tax relief, and cuts in lending rates and banks' reserve requirements.

Those efforts cement the goal of keeping the domestic market as the mainstay while the domestic and foreign markets work to boost each other. They also galvanize China's rebalancing of the economy from an export- and investment-driven one toward more focus on consumption and supply-side structural reforms.

China's robust recovery has spillover effects, especially on its neighbors and trading partners, and will support the global economy's difficult climb out of the hellish pandemic, International Monetary Fund (IMF) Chief Economist Gita Gopinath said.

At the current growth rate, China is poised to contribute an additional $1.5 trillion to global gross domestic product (GDP) next year, and Chinese consumers will drive close to 40 percent of that, said British economist Jim O'Neill, best known for coining the acronym BRICS, adding that consumer spending continues to account for a growing share of China's expansion.

That has been largely manifested in the country's Golden Week holiday at the start of October, which is widely observed as a bellwether of China's consumption and growth potential following its success in taming the pandemic and lifting most domestic travel restrictions.

In particular, China has made an essential contribution to the recovery of global trade since June. Through global trade, China has been playing a key role in supplying much-needed medical equipment and stay-at-home related products across the globe thanks to the country's broad manufacturing base.

Meanwhile, China's import demand is propping up intra-regional trade and helping to contribute to global demand, said World Trade Organization senior economist Coleman Nee.

For Q3, despite rising protectionism and unilateralism worldwide, the country's foreign trade of goods increased 7.5 percent year-on-year to 8.88 trillion yuan ($1.32 trillion), hitting a historic quarterly high, with exports up 10.2 percent and imports climbing 4.3 percent, according to China's General Administration of Customs.

China's impressive performance gels with broad anticipation worldwide for an improving economic outlook for the year. Noticeably, a group of international financial institutions have revised up their forecasts for China's GDP growth this year.

In its latest World Economic Outlook report released last week, the International Monetary Fund (IMF) projected China's economy would grow by 1.9 percent this year, 0.9 percentage point above the IMF's June forecast. International rating agency Moody's also lifted its forecast for China's yearly GDP growth rate to 1.9 percent from 1 percent earlier.

That rosy outlook has also led more Wall Street players and foreign investors to expand in China's financial sector, which is opening wider with a better business environment and more opportunities, and boosts global capital flow and liquidity in the long term.

For instance, US asset management giant BlackRock has obtained the greenlight to establish a Chinese fund business, while JPMorgan Chase eyes buying full control of its Chinese mutual fund venture.

Obviously, China's strong economic rebound has made an irreplaceable contribution to driving global growth this year. With the annual China International Import Expo set to open next month, the world has much to anticipate for China to continue to buoy the world economy more than ever going forward.

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