Premier Li Keqiang expects China to achieve positive growth in 2020
September 22, 2020 Category China News Round-up, Weekly
China’s economy could achieve positive growth in 2020, Chinese Premier Li Keqiang told a virtual gathering of nearly 600 business leaders from all over the world in a special dialogue organized by the World Economic Forum (WEF). “I have confidence that the Chinese economy is expected to achieve positive growth for the whole year, and this will be enabled by efforts from the government, the business community and average households,” Premier Li said. He struck an increasingly confident tone in describing whether or how positive economic growth can be achieved for 2020. His comments came as the world’s second-largest economy recovers from the onslaught of the Covid-19 pandemic. China announced better-than-expected economic data for August. In the first quarter, when the pandemic hit the Chinese economy the hardest, China’s GDP plunged 6.8%. In the second quarter, the figure recovered to 3.2% growth. China was the only G20 country recording positive economic growth in the second quarter of 2020, according to the Organization for Economic Co-operation and Development (OECD).
“As much of the world is still focused on its public health response, it makes us hopeful to hear about the early signs of an economic recovery in China,” said WEF Founder and Executive Chairman Klaus Schwab. “The recovery plans discussed by Premier Li provide one blueprint to combat the spread of the virus and resume economic life safely. This kind of experience-sharing is crucial to ensuring we leave the pandemic behind us sooner rather than later,” said Schwab. Top executives, including Stephen A. Schwarzman, Chairman of Blackstone Group, and Joe Kaeser, CEO of Siemens, participated in the event. “We must each live up to our responsibility to support multilateralism and to bring a message of hope and confidence to people around the world. We hope that we can all work to promote trade and investment, liberalization and facilitation, which has already been severely affected by Covid-19,” the Chinese Premier said, as reported by the Global Times.
China’s industrial output accelerated the most in eight months in August, while retail sales grew for the first time this year. Retail sales of consumer goods rose 0.5% year-on-year in August, following a drop of 1.1% in July. Industrial output increased 5.6% year-on-year in August, accelerating from the rise of 4.8% registered in July. In the first eight months, industrial output expanded 0.4% from a year earlier. Exports in August rose at a faster than-expected pace, increasing 11.6% year-on-year, though imports edged down 0.5% from a year earlier. Fixed-asset investment edged down 0.3% year-on-year in the first eight months, further narrowing from a fall of 1.6% posted in the January-July period. Private sector fixed-asset investment, which accounts for more than half of total investment, fell 2.8% in the January-August period, compared with a decline of 5.7% in the first seven months. In the first eight months, more than CNY8.67 trillion worth of new homes, excluding government-subsidized affordable housing, were sold around China, a year-on-year increase of 4.1%.
From January to August, the actual use of foreign capital reached USD89 billion, down 0.3% from the same period last year. The fall in the utilization of foreign capital narrowed month by month since April, according to Meng Wei, Spokeswoman for the National Development and Reform Commission (NDRC). A report by the American Chamber of Commerce in Shanghai said that despite the Trump administration’s push for U.S. companies to restore their operations, 78.6% of respondents reported no change in their investment strategy, up 5.1 percentage points compared with 2019. “American companies still see China’s consumer market as a great opportunity. China’s recent efforts to open insurance and asset management to foreign participation are also welcome,” said Chamber President Ker Gibbs. China continued to be the world’s second-largest source of foreign investment in 2019, with its outbound direct investment standing at USD136.91 billion. At the end of 2019, China’s ODI stock reached USD2.2 trillion, following the United States at USD7.7 trillion and the Netherlands at USD2.6 trillion. In 2019, Chinese enterprises abroad employed 2.27 million foreign employees, an increase of 389,000 compared with 2018.
This overview is based on reports by the China Daily, Shanghai Daily and Global Times.
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