Ahead of China's GDP Announcement on the 19th, 5% Growth Expected

After a 'V'-shaped rebound in Q2, further rise expected in Q3... Hopes pinned on domestic demand
Greater expectations for Q4 growth, clear domestic recovery during National Day holiday

[Asia Economy Beijing=Special Correspondent Jo Young-shin] Ahead of the announcement of China's third-quarter Gross Domestic Product (GDP) on the 19th, there is a forecast that the Chinese economy will grow by 5%.

Following an unprecedented negative growth of minus 6.8% in the first quarter due to the COVID-19 pandemic, the Chinese economy is expected to see an additional rise in the third quarter after a 'V'-shaped rebound in the second quarter.

Since August, the Chinese domestic market has recovered to its usual level, strengthening this outlook.

The state-run Global Times reported on the 7th that strong manufacturing output and domestic demand will serve as the foundation for economic growth in the third quarter.

Analyst Liu Xueji of Bank of Communications said, "Considering cumulative investment in manufacturing and quarterly retail sales, we expect 5% growth in the third quarter," adding, "Domestic demand will be the growth driver in the third quarter."

He also stated, "With improvements in the epidemic situation, China's export growth will continue until the end of the year," and forecasted, "As the world's second-largest economy, China will achieve an annual growth rate of 2% despite the global recession caused by the pandemic."

The Global Times further explained that key economic indicators such as production, consumption, investment, and employment are improving.

The Manufacturing Purchasing Managers' Index (PMI) is a representative example. The September PMI released by the National Bureau of Statistics of China was 51.5, up from 51.0 in the previous month, marking seven consecutive months of economic expansion. The manufacturing PMI index indicates economic expansion when it exceeds the baseline of 50, and contraction when it falls below.

Global Times reported that Nomura Financial Group of Japan also forecasted 5.2% growth for China in the third quarter through a report.

Bank of China previously issued a positive outlook, projecting 5.1% growth in the third quarter and 5.6% in the fourth quarter.

In particular, Chinese economic analysis institutions show considerable expectations for China's economic growth in the fourth quarter. The dominant view is that domestic demand will normalize around the National Day holiday (October 1?8).

The Global Times emphasized that as of the 4th, the number of domestic tourists in China was 425 million, with tourism revenue reaching 31.2 billion yuan (approximately 5.3445 trillion Korean won). This corresponds to 78% and 68% of the previous year's levels, respectively.

It added that major cities such as the capital Beijing and Shanghai have recovered to about 85% of last year's levels.

The Global Times expressed optimism about the fourth quarter, stating, "If the current trend continues, there is a high possibility of rapid growth in the service sector, including tourism, in the fourth quarter."

However, the Global Times also noted that uncertainties due to US-China tensions and the potential risk of COVID-19 still exist, so the situation needs to be monitored further.

This content was produced with the assistance of AI translation services.