By Gina Lee
Investing.com – China continued to tread a robust path towards economic recovery from COVID-19 in August, with retails sales growing for the first time in 2020 and industrial output accelerating the fastest in eight months.
Data released earlier in the day by the National Bureau of Statistics (NBS) said that retail sales increased 0.5% year-on-year, beating the forecast 0.1% growth prepared by Investing.com and July’s contraction of 1.1%. Meanwhile, industrial production increased 5.6% year-on-year, beating both its own forecast 5.1% growth and the 4.8% growth seen in July.
August's unemployment rate was 5.6%, against July’s 5.7%.
The Chinese economy saw pent-up demand, government stimulus and exports that have been surprisingly resilient fuel its recovery from the COVID-19-induced paralysis seen at the beginning of the year. Recent data, including trade, producer prices and factory activity, also all pointed to a continuous recovery.
“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,” Oxford Economics’ Louis Kuijs told Reuters.
Consumer confidence also continues to increase, with an uptick in sales of automobiles and duty-free shopping. Confidence has also been boosted by government stimulus measures, as well as measures to keep COVID-19 under control in the country.
“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,” Kuijs said.
But some investors struck a cautionary note over simmering U.S.-China tension, which could escalate in the run-up to November’s U.S. presidential elections.
NBS spokesman Fu Linghui warned during a briefing that the current economic recovery remains unbalanced given the still-fragile consumption and heightened external risks.
“Externally, there are still many unstable and uncertain factors. On the domestic side, in the process of economic recovery, some industries and enterprises are still facing difficulties, and the recovery is unbalanced,” Fu said.
The number of COVID-19 cases continues to rise, with over 29.1 million global cases as of September 15 according to Johns Hopkins University data. The possibility of fresh outbreaks in the winter are also increasing investor jitters.