China’s factory output quickens as retail sales surge

This photo taken on September 14, 2020 shows employees working on a car assembly line at a Dongfeng factory in Wuhan in China's central Hubei province. (AFP)
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Updated 16 September 2020

China’s factory output quickens as retail sales surge

  • Industrial output growth quickened to 5.6 percent in August from a year earlier

BEIJING: China’s industrial output accelerated the most in eight months in August, while retail sales grew for the first time this year, suggesting the economic recovery is gathering pace as demand starts to improve.

An annual decline in fixed-asset investment over January-August also moderated due to government stimulus efforts.

After the pandemic paralyzed the economy, China’s recovery has been gaining momentum as pent-up demand, government stimulus and surprisingly resilient exports propel a rebound.

“We think that China’s economic recovery is on a reasonably firm footing now and should continue through Q4 and into 2021, with solid investment growth, gradually recovering consumption momentum and resilient exports,” said Louis Kuijs at Oxford Economics.

Industrial output growth quickened to 5.6 percent in August from a year earlier, the fastest gain in eight months, data from the National Statistics Bureau showed on Tuesday. Analysts polled by Reuters had expected a 5.1 percent rise from 4.8 percent in July.

Retail sales also rose 0.5 percent on-year, snapping a seven-month downturn and beating analysts’ forecast for zero growth. It July, sales dropped 1.1 percent.

Consumer confidence has been picking up lately, from spending on automobiles and duty-free shopping. Auto sales rose 11.8 percent in August from a year earlier while sales of telecoms products jumped 25.1 percent year-on-year, the data showed.

Fixed-asset investment fell 0.3 percent in January-August from the same period last year, compared with a forecast 0.4 percent slide and a 1.6 percent decline in the first seven months of the year.

Private sector fixed-asset investment, which accounts for 60 percent of total investment, fell 2.8 percent in January-August, compared with a
5.7 percent decline in the first seven months of the year.

Saudi Arabia to host ‘virtual’ G20 meeting on oil markets

Updated 27 September 2020

Saudi Arabia to host ‘virtual’ G20 meeting on oil markets

  • Energy ministers will also discuss plans for ‘green’ economic recovery from ravages of coronavirus pandemic

DUBAI: Energy ministers from the G20 countries under the presidency of Saudi Arabia will meet virtually on Sunday to discuss volatile oil markets and plans for a “green” recovery from the economic shock of the COVID-19 pandemic.

The Kingdom is strongly backing a “circular carbon economy” strategy to remove harmful greenhouse gas emissions from the atmosphere.

The two-day event is the second time this year that energy policymakers have come together, following the historic meeting last April that helped stabilize crude markets in meltdown.

Markets have since recovered and the price of benchmark Brent crude has more than doubled, but doubts about their resilience have resurfaced amid fears of a “second wave” of economic lockdowns.

Prince Abdul Aziz bin Salman, the Saudi energy minister and chairman of the G20 event, has highlighted the need for tight discipline by members of the OPEC+ oil producers’ alliance to combat market “uncertainty.” 

“If we are serious about mitigating the impact of the shock and navigating through these extraordinary times, this is our only path,” he said.

The G20 said ministers would discuss ways to “strengthen collaboration toward market stability and security and discuss promoting and advancing sustainable energy systems through the Circular Carbon Economy platform,” and address “advancing universal access to energy and clean cooking for all.”

There is consensus on the need to mitigate harmful emissions, but some European countries and nongovernmental organizations are believed to be pressing for a stronger stance on fossil fuels.

The Saudi strategy, supported by the US and Russia, is for a more inclusive stance on hydrocarbon resources, while simultaneously promoting renewable sources such as solar and wind.