China’s Economy Receives a Major Boost from Retail Shoppers
China is recovering more from the ongoing historic slump of the global economy as more shoppers flock the market for domestic purchases.
As the second largest economy in the world, China’s recovery for the past four months has been impressive, given the current status of the global economy. Consumers are now taking recovery a now notch higher with increased retail sales which rose to 3.36 trillion Yuan, representing a 0.5% increment from 2019.
While the growth is small, Chinese authorities are happy with the progress, which marks the first time in 2020 that retail sales have recorded gains, adding that further growth is being experienced in other sectors as well.
According to Fu Linghui, the Spokesman for National Bureau of Statistics the stabilizing job market in China and loosened travel restrictions have cultured more people that are willing to go out and spend.
As the only major economy poised to expect growth in 2020, increased news of more expected recovery are setting China further and further apart from the fate of the rest of the world.
Developed Countries like the US, Canada, the UK Germany, France, Japan and Italy already recorded dramatic contractions in the first half 2020. The performance has left, little to no room for notable growth for the rest of the year and even beyond.
The International Monetary Fund has estimated that China as the best performing economy of 2020 will record a growth of only 1%.
“The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery projected to be more gradual than previously forecast.”
China Is Approaching Recovery with Caution
The IMF further stated that the damages to economies has so far proven to be higher than previously estimated with the global gross product in 2021 expected to grow by only 5.4%.
“In 2021 global growth is projected at 5.4%. Overall, this would leave 2021 GDP some 6.5% points lower than in the pre-covvd-19 projections of January 2020.”
In China, the economy of 14 trillion contracted by 6.8% in the worst performance of its recorded history since 1992. In the second quarter, China was among the first countries to contain the spread of coronavirus and to gradually reopen some parts of its economy. This move saw China grow by 3.2% at a time when other economies shrank by double digits.
The second quarter data pointed that China’s retail sector was weak, due to reduced spenditure and people unwilling to leave their homes in fear of catching the Coronavirus.
Ticket and cars ales have particularly increased with majority of spending coming from wealthier individuals, with the data suggesting that more broadening it is to be expected.
China Is Expecting More Growth
China had earlier reported growth in its industrial production, at 5.6% slightly lower than the expected growth, outing it behind July’s 5.7% performance. The positive economic news coming from several of its sectors is set to expand in the fourth quarter.
The chief economist of for Greater China Iris Pang, stated that the growth has brought back more jobs into the market.
“This is indeed the internal growth circulation that China is promoting.” Added Pang.
