Indicators show China’s economy continues to grow
China’s economic recovery is picking up greater momentum, key indicators from consumption to production show.
The latest purchasing managers’ index for China’s manufacturing sector, which came in at 50.2 in September, indicates an expansion, making four consecutive months of growth. Any score of above 50 represents growth; a figure below 50 means the sector has contracted.
China’s major industrial firms saw a strong rebound in profits in August, growing 17.2% from a year earlier and representing the first increase since the second half of 2022, following a decline of 6.7% in July and an 8.3% fall in June.
“Judging from China’s headline activity data, positive factors in China’s economy are amassing,” said Wen Bin, chief economist at China Minsheng Bank. Wen said the pickup came as a range of government measures were implemented, designed to support the private economy, invigorate the capital market and expand strategic emerging industries.
Consumption has emerged as a bright spot in the country’s economic performance.
Data from the National Bureau of Statistics also indicate a strengthening economic recovery, its latest figures show that retail sales of consumer goods increased 4.6% year on year in August, following 2.5% growth in July.
Chen Li, chief economist of Chuancai Securities, expects consumption to pick up at a quicker pace in the fourth quarter of the year, boosted by the Mid-Autumn Festival and National Day holiday, as well as the ‘Double 11’ online shopping festival.
Analysts say the property sector, a pillar of the country’s economy that has held back the economic recovery, will also see a recovery over the rest of the year, thanks to government support.
The China Daily website reported: “China has adjusted its policies to maintain the sound development of the property sector, including adjustments to ease restrictions on the classification of first-home buyers, lower existing first-home loan rates and extend tax incentives. Observers say these adjustments have been conducive to restoring confidence, improving market expectations and promoting economic recovery.”
On the back of government policy, trading in the real estate market has become brisker, according to a report released by the China Index Academy property research institution. In September, the total sales of the country’s top 100 real estate developers surged 24.8% month on month, the report said.
Going forward, experts say the economic recovery will be sustained in the fourth quarter, with consumption and real estate being the most noteworthy sectors in this regard.
“With the countercyclical policies continuing to show their impact, the growth will be shored up further,” Wen said, forecasting that economic growth will remain within a reasonable and prudent range in the third and fourth quarters.
SMEs benefiting from greater access to finance
The balance of China’s inclusive loans to small and micro businesses stood at 27.8 trillion yuan (about $3.87 trillion) at the end of August, the country’s central bank said.
According to the People’s Bank of China(PBOC), the loan growth rate has remained above 20% for three consecutive years.
The loans had supported 60.25 million small businesses by the end of August, the PBOC said.
In August, the weighted average interest rate of new loans to small and micro businesses stood at 4.48%, 1.7 percentage points lower than that at the end of 2018.
The quality of inclusive finance is an important symbol of the quality of financial development, said Liu Guoqiang, deputy governor of the bank, urging efforts to step up financial support to small and micro private enterprises, consolidate the foundation of financial services related to agriculture, expand coverage of inclusive finance and protect consumers’ rights and interests.
In China, SMEs generate almost 50% of the country’s tax revenue and 60% of GDP. They also contribute to 70% of the nation’s technology innovation and are responsible for 80% of urban employment.
