(Yicai Global) Oct. 20 -- China’s economy in the fourth quarter is likely to expand at a faster clip than in the previous quarter as several of the country’s key economic indicators turned positive for the first time this year in the three months ended September and the momentum of recovery stays strong.

China's annual gross domestic product gain may reach 6 percent in the fourth quarter, with full-year growth at around 2.2 percent, said Wang Qing, chief macro analyst at Beijing-based Golden Credit Rating.

Judging from demand and production, the confidence and vitality of the whole market and other aspects, we have the foundations, conditions and confidence to keep the current trend into the fourth quarter and even the full year, National Bureau of Statistics spokesperson Liu Aihua said.

The country’s GDP grew by 4.9 percent in the three months ended Sept. 30 from a year earlier, according to figures released by the NBS yesterday. However, the data fell short of expectations, missing the average 5.26 percent forecast from economists polled by Yicai Global and the 6 percent clip reported a year earlier.

It was enough, though, to bring the economy back into the black, achieving aggregate growth of 1.3 percent in the first three quarters, following the sharp drop of 6.8 percent in the first quarter and a moderate 3.2 percent gain in the second quarter.

China’s post-pandemic recovery is now being driven by both supply and demand as consumption rebounds, as opposed to only by the supply end, said Shen Jianguang, chief economist at fintech firm JD Digits. This bodes well for China’s performance in the fourth quarter and 2021.

Key Indicators

The total retail sales of consumer goods rose 0.9 percent in the third quarter in the first positive quarterly growth all year, the NBS said. By comparison, in the first nine months it fell 7.2 percent year on year to CNY27.3 trillion (USD4 trillion).

The easing of restrictions in the movie industry helped to promote spending in brick-and-mortar locations, Wang Jun, a member of the China Center for International Economic Exchange's Academic Committee, told Yicai Global. An uptick in auto sales and food and beverage consumption also boosted the retail sales of consumer goods.

Fixed-asset investment was back to positive growth in the nine months ended Sept. 30, advancing by 0.8 percent year on year to CNY43.65 trillion (USD6.5 trillion) and reversing an aggregate drop of 3.1 percent in the first two quarters.

It grew 7.5 percent last month, more than the gain in consumption, Chasing Institute's vice president Wu Chaoming said. Manufacturing investments rose for two straight months to 3 percent growth in September but the risk of a second outbreak overseas remains high and the recovery of the manufacturing sector remains slow.

Fixed-asset investment growth may reach 10 percent in the fourth quarter as consumption continues to rebound and exports are unlikely to fall significantly, Wang Qing said.

The unemployment rate in cities was down to 5.4 percent from the 6.2 percent seen at the start of the year, according to NBS data.

This can be credited to the quick recovery of the Chinese economy and the measures taken by governments at all levels to stabilize and secure jobs, said Zhang Chenggang, director at the Capital University of Economics and Business' China Research Center for New Employment Patterns.

Global Arena

China will be the only major economy to grow this year, the International Monetary Fund said on Oct. 13. The IMF raised its annual growth forecast for the world’s second-largest economy to 1.9 percent, from a 1 percent prediction made in June, and expects the figure to reach 8.2 percent in 2021. The global economy, meanwhile, is likely to shrink 4.4 percent this year, it said.

Editor: Kim Taylor