Fri, 08 Dec 2023

© Provided by Xinhua

BEIJING, Oct. 3 (Xinhua) -- China's economic recovery is gathering speed as key indicators from consumption to production pick up, meaning the country's pro-growth policies are taking effect.

The latest indicator to perk up is the purchasing managers' index for China's manufacturing sector, which came in at 50.2 in September, bouncing back to expansion territory after four consecutive months of growth.

China's major industrial firms saw a strong rebound in profits in August, surging 17.2 percent from a year earlier and representing the first increase since the second half of 2022, following a decline of 6.7 percent in July and an 8.3 percent fall in June.

Supporting the recovery, consumer prices returned to growth territory in August and the decline of producer prices narrowed for a second consecutive month, pointing to an improved supply-demand balance.

"Judging from China's headline activity data, positive factors in China's economy are amassing," said Wen Bin, chief economist at China Minsheng Bank, noting that the pickup came as a range of government measures were implemented on the ground, 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 shows that retail sales of consumer goods, a major indicator of consumption strength, increased 4.6 percent year on year in August, following a 2.5 percent expansion in July.

The fervor for travel over the ongoing eight-day Mid-Autumn Festival and National Day holiday exemplifies China's strong consumption demand. According to Fliggy, Alibaba's travel platform, orders for domestic trips during the holiday surged nearly 600 percent year on year, and orders for overseas trips skyrocketed more than 2,000 percent.

Cumulative hotel bookings in Beijing, Shanghai, Foshan and other major cities during the holiday have soared approximately 500 percent from last year, according to Fliggy.

Chen Li, chief economist of Chuancai Securities, expects the consumption market to pick up at a faster clip in the fourth quarter of the year, partly boosted by the Mid-Autumn Festival and National Day holiday, as well as the upcoming "Double 11" online shopping festival.

Analysts say the property sector, a pillar of the country's economy that has been a drag on economic recovery, will also embrace a notable recovery over the rest of the year, thanks to government support.

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 policy tailwinds, trading in the real estate market has become brisker. In September, the total sales of the country's top 100 real estate developers surged 24.8 percent month on month, according to a report released by the China Index Academy property research institution.

Going forward, experts say that the recovery momentum 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.

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