The purchasing managers index for the manufacturing sector has been on the decline for six months in a row, and fell below the 50 threshold in September, representing contraction.
Since the outbreak of the COVID-19 pandemic, the investment in real estate has performed better than that in infrastructure, while the investment in the manufacturing sector is even worse than that in infrastructure, because of the weak total demand both domestically and internationally. The figure rebounded to 4.4 percent in September, still at a low level. The slower consumption growth is associated with the resurgence of the pandemic in the summer. The year-on-year growth rate of social retail sales of consumer goods dropped from 8.5 percent in July to 2.5 percent in August, a worrying sign. Until these families' incomes rebound to the pre-pandemic levels, the recovery of consumption will remain sluggish. The reason consumption is registering such a slow recovery is that the pandemic has hit the service industry particularly hard－and therefore its employees hard, most of whom belong to middle and low-income groups. Statistics show the country's macro-economy faces significant downward pressure in the short run.Īmong the three forces driving the economy, net exports have registered the strongest performance since the outbreak of the novel coronavirus, followed by investment, and lastly consumption. Although the growth rate this year is expected to be the highest since 2011, we should not be too optimistic.Ĭompared with 2019, the average GDP growth rate for 20 stands at 5.1 percent, lower than the expected rate of about 6 percent. It fell to 4.9 percent in the third quarter and is expected to dip further in the fourth quarter. The author contributed this article to China Watch, a think tank powered by China Daily.Ĭhina's GDP expanded by 18.3 percent and 7.9 percent in the first and second quarters of this year. Zhang Ming is senior research fellow of IMI and deputy director of the Institute of Finance and Banking at the Chinese Academy of Social Sciences. This article first appeared in China Daily Global on November 2, 2021.
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