China's GDP to grow 2.5% for 2020, driven by consumption

By Yin Yeping Source: Global Times Published: 2020/10/18 19:52:32

GDP Photo: VCG

Despite the coronavirus pandemic and trade frictions with the US, China's GDP growth is estimated to have jumped to about 5 percent in the third quarter, and it's predicted to reach at least 2.5 percent for the whole year. That would make it the only major economy in the world to grow thanks to strong policy support from Beijing.

The National Bureau of Statistics will release the third-quarter GDP figure on Monday, but several Chinese economic analysts that the Global Times reached were confident that economic growth has expanded during the period.

China achieved a V-shaped recovery of 3.2-percent growth in the second quarter after a decline of 6.8 percent in the first quarter.

Lian Ping, head of the Zhixin Investment Research Institute, said that domestic consumption will play a major part in expansion in the second half of the year.

During the October Golden Week holiday alone, more than 600 million people traveled across the country, generating tourism revenue of more than 450 billion yuan, which reflected a strong market rebound after the pandemic is controlled in China.

"The consumption rebound will help increase government revenue, which will be further reflected in rising investment in infrastructure," said Lian, noting that infrastructure investment is expected to be another growth driver for the rest of the year.

Yin Xingmin, a professor at the China Center for Economic Studies at Fudan University, said that more policy support — including bond issues by the central and local governments — is expected, and he estimated that GDP growth in the third quarter was between 5 and 6 percent, and full-year expansion could be around 2.5 percent.

"Regions like South China's Guangdong Province, the leading edge of reform and opening-up where more government support is expected, are likely to see comparatively higher economic growth in the country," said Yin.

Meanwhile, the second wave of the pandemic that has swept across many parts of Europe and the US has hit global production harder than expected, which in turn has led to rising imports from China, experts said.

Data released by the General Administration of Customs showed that China's total merchandise trade in the first three quarters was 23.12 trillion yuan, up 0.7 percent year-on-year, meaning that the cumulative growth rate of foreign trade turned positive for the first time this year.

"The second wave of the outbreak has hit the global supply chain hard, which led to increasing imports from China," said Cao Heping, professor at the School of Economics of Peking University, predicting that the trend might continue if the pandemic is not eased.

However, experts agreed that foreign trade is not the major driving force for China's economy, as the country is shifting its industrial structure toward the domestic market, where public consumption in the post-pandemic era appears stronger.

Since the end of August, the COVID-19 situation has been basically stable in China, and consumer expenditure has exploded. That is reflected in the release of pent-up demand during the Golden Week holidays in October, and it will be further demonstrated in the upcoming Double Eleven online-shopping festival, said Cao.

Newspaper headline: GDP to grow 2.5% for 2020, driven by consumption


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