economy recovery Archives - Iran News Daily

World Trade Rebound Is Fragile

reporter 1222 — Wed, 21 Oct 2020 10:14:11 +0000

TEHRAN (Iran News) – The value of global trade is set to fall by 7% to 9% in 2020 from the previous year, despite signs of a fragile rebound led by China in the third quarter, a United Nations report said on Wednesday.

No region was spared by an estimated 19% year-on-year plunge in world trade in the second quarter, as the COVID-19 pandemic disrupted economies, the UN Conference on Trade and Development (UNCTAD) said, Reuters reported.

Global trade recovered somewhat in the third quarter, when it was estimated at about 4.5% less than in the same period a year ago, the agency said in its latest update.

“Trade in home office equipment and medical supplies has increased in Q3, while it further weakened in the automotive and energy sectors,” UNCTAD said. Growth in the textiles sector was also strong.

Its preliminary forecast put year-on-year growth for Q4 2020 at 3% less, but the report said that uncertainties persisted due to how the pandemic would evolve.

If the pandemic resurges in coming months, that could lead to a deteriorating environment for policy-makers and sudden increase in trade restrictive policies, it said.

China’s exports rebounded strongly in the third quarter after falling in the early months of the pandemic, and have posted year-on-year growth rates of nearly 10%, UNCTAD said.

“Overall, the level of Chinese exports for the first nine months of 2020 was comparable to that of 2019 over the same period,” it said.

Chinese demand for imported products recovered following a decline in Q2 2020, contrary to other major economies, it said.

Earlier this month the World Trade Organization (WTO) upgraded its forecast for trade in goods due to improvements from June and predicted a drop of 9.2% for 2020.

But it saw a more muted rebound in 2021, with further lockdowns from a second wave of COVID-19 infections posing clear risks.

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China’s Economy Continues to Recovery from COVID-19 Pandemic

reporter 1222 — Mon, 19 Oct 2020 06:38:18 +0000

TEHRAN (Iran News) – China’s economy continues its recovery from the COVID-19 pandemic according to its latest official figures.

The world’s second-biggest economy saw growth of 4.9% between July and September, compared to the same quarter last year, BBC reported.

However, the figure is lower than the 5.2% expected by economists.

China is now leading the charge for a global recovery based on its latest GDP data.

The near-5% growth is a far cry from the slump the Chinese economy suffered at the start of 2020 when the pandemic first emerged.

For the first three months of this year China’s economy shrank by 6.8% when it saw nationwide shutdowns of factories and manufacturing plants.

It was the first time China’s economy contracted since it started recording quarterly figures back in 1992.

Gathering pace

The key economic growth figures released on Monday suggest that China’s recovery is gathering pace, although experts often question the accuracy of its economic data.

The quarterly figures are compared to the same quarter of 2019.

“I don’t think the headline number is bad,” said Iris Pang, chief China economist for ING in Hong Kong. “Job creation in China is quite stable which creates more consumption.”

China’s trade figures for September also pointed to a strong recovery, with exports growing by 9.9% and imports growing by 13.2% compared to September last year.

Over the previous two decades, China had seen an average economic growth rate of about 9% although the pace has gradually been slowing.

While the COVID-19 pandemic has hampered this year’s growth targets, China is also embroiled in a trade war with the US which has escalated in recent months.

Cash injections

The Chinese government has rolled out a raft of measures this year to revive the coronavirus-hit economy and support employment.

While the central bank stepped up policy support earlier this year after widespread travel restrictions choked economic activity, it has more recently held off on further easing.

Premier Li Keqiang warned earlier this month that China needs to make arduous efforts to achieve its full-year economic goals.

For the second quarter of this year, economic growth in China reached 3.2% as its started its rebound.

“China’s economy remains on the recovery path, driven by a rebound in exports,” said Yoshikiyo Shimamine, chief economist at the Dai-Ichi Life Research Institute in Tokyo.

“But we cannot say it has completely shaken off the drag caused by the coronavirus.”

Broadening recovery

China’s economy continues to grow at rates unimaginable in other COVID-hit countries.

Draconian lockdown measures to control the virus combined with some government stimulus appeared to have worked well.

While growth of 4.9% is slightly below some forecasts, industrial output – a good barometer of state controlled activity – came in above expectations.

The ruling Communist Party of China wanted to see ramped up supply, but retail sales were slower than predicted.

Nonetheless it appears to be a broadening recovery with the all-important services sector rebounding.

Domestic tourists and travelers have probably helped the recovery continue by spending their money at home because global restrictions mean they can’t – yet – go abroad.

Travel boom

China’s economy should also get a boost this year from “Golden Week” – an annual holiday in October that sees millions of Chinese travel.

With international travel severely restricted, millions of Chinese have been traveling, and spending, domestically instead.

There were 637m trips in China over the eight-day holiday which generated revenue of 466.6bn RMB ($69.6bn, £53.8bn), according to data from its Ministry of Culture and Tourism.

Duty-free sales in the tropical island province of Hainan more than doubled from last year, soaring by nearly 150% according to the local customs data.

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Chinese Retail Sales Up, Economy Recovery Continues

reporter 1222 — Wed, 16 Sep 2020 05:35:55 +0000

TEHRAN (Iran News) – Chinese retail sales rose in August for the first time since the coronavirus pandemic struck, data showed Tuesday, as officials try to kickstart the crucial domestic consumer sector to fuel recovery in the world’s number-two economy.

Spending had previously remained sluggish despite China bringing the virus largely under control, with shoppers still cautious owing to global uncertainty – but economists believe the latest data suggests recovery is on a firmer footing, AFP reported.

The key indicator of consumer sentiment rose 0.5% on-year last month. A poll of analysts by Bloomberg News had forecast no growth.

Beijing has ramped up initiatives such as shopping festivals and voucher campaigns to spur consumer spending.

The latest reading is an improvement on the 1.1% drop seen in July and much better than the 20.5% plunge suffered in January-February when millions of people were put into lockdown to prevent the virus from spreading.

With external demand expected to remain weak as China’s major trading partners struggle to contain the disease, China has redoubled efforts to encourage its exporters to target its vast local market instead.

Oxford Economics economist Louis Kuijs said the economic recovery was “on a reasonably firm footing now… with solid investment growth, gradually recovering consumption momentum and resilient exports”.

Industrial output, which has recovered more quickly than retail, strengthened further, rising 5.6%, which also beat forecasts and improved on July’s 4.8% increase.

Julian Evans-Pritchard from Capital Economics said that with fiscal spending set to be ramped up and a revival in consumer confidence, China’s economy was on track to return to its pre-virus growth rate before the end of the year.

On Tuesday, National Bureau of Statistics spokesman Fu Linghui told reporters that China’s economy had a “sustained steady recovery”.

But he cautioned that with “mounting uncertainties” internationally and “pronounced domestic structural problems, there remains huge pressure to keep employment and businesses stable, and to safeguard people’s livelihood”.

The urban unemployment rate, a cause for concern given China’s large number of fresh graduates, inched down to 5.6%.

Analysts have warned that the real level of unemployment is likely higher than official numbers suggest, with smaller businesses hit hard by the virus fallout.

Despite the stronger data in August, Nomura chief China economist Lu Ting cautioned that rising US-China tensions could hit exports and manufacturing investment.

Although tensions with the US have escalated on various fronts, top negotiators from Washington and Beijing have been pushing ahead with a partial trade deal signed in January, which marked a truce in a long-running and bruising trade war.

And China’s customs tariff commission said Tuesday it would extend a year-long exemption of 16 categories of products from US tariffs, ranging from seafood products to anti-cancer drugs.

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