China’s economy accelerates as virus recovery gains strength

People walk past an Apple store in Beijing on October 19, 2020. (AFP)
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Updated 20 October 2020

China’s economy accelerates as virus recovery gains strength

  • China is the only major economy that is expected to grow this year while activity in the US, Europe and Japan shrinks

BEIJING: China’s shaky economic recovery from the coronavirus pandemic is gaining strength as consumers return to shopping malls and auto dealerships while the United States and Europe endure painful contractions.

Growth in the world’s second-largest economy accelerated to 4.9 percent over a year earlier in the three months ending in September, up from the previous quarter’s 3.2 percent, official data showed Monday. Retail spending rebounded to above pre-virus levels for the first time and factory output rose, boosted by demand for exports of masks and other medical supplies.

China is the only major economy that is expected to grow this year while activity in the US, Europe and Japan shrinks.

The recovery is “broadening out and becoming less reliant” on government stimulus, Julian Evans-Pritchard of Capital Economics said in a report. He said growth is “still accelerating” heading into the present quarter.

Most Asian stock markets rose on the news of increased activity in China, the biggest trading partner for all of its neighbors. Japan’s Nikkei 225 index added 1.1 percent while Hong Kong’s Hang Seng climbed 0.9 percent. Markets in South Korea and Australia also rose. China’s benchmark Shanghai Composite Index lost 0.7 percent on expectations the relatively strong data will reduce the likelihood of additional stimulus that might boost share prices.

China, where the pandemic began in December, became the first major economy to return to growth after the ruling Communist Party declared the disease under control in March and began reopening factories, shops and offices. The economy contracted by 6.8 percent in the first quarter, its worst performance since at least the mid-1960s, before rebounding.

The economy “continued the steady recovery,” the National Bureau of Statistics said in a report. However, it warned, “the international environment is still complicated and severe.” It said China faces great pressure to prevent a resurgence of the virus.

Authorities have lifted curbs on travel and business but visitors to government and other public buildings still are checked for the virus’s telltale fever. Travelers arriving from abroad must be quarantined for two weeks.

Industrial production rose 5.8 percent over the same quarter last year, a marked improvement over the first half’s 1.3 percent contraction. Chinese exporters are taking market share from foreign competitors that still are hampered by anti-virus controls.

Retail sales rose 0.9 percent over a year earlier. That was up from a 7.2 percent contraction in the first half as consumers, already anxious about a slowing economy and a tariff war with Washington, put off buying. Online commerce rose 15.3 percent.

In a sign demand is accelerating, sales in September rose 3.3 percent.


Saudi central bank governor expects more competition, growth in fintech

Updated 01 December 2020

Saudi central bank governor expects more competition, growth in fintech

  • SAMA issued several regulations and systems related to fintech, as part of its efforts to promote the sector

DUBAI: The Saudi Central Bank (SAMA) expects more competition and growth in the new sectors such as financial technology (fintech), as well as the conventional industries of the capital market, including banks, said Governor Ahmed Alkholeify.

Speaking during the opening session of “Fintech Tour 2020”, the SAMA governor stated that the central bank took a key step towards activating the Sandbox experimental environment, which resulted in the establishment of 32 fintech firms.

In addition, SAMA issued several regulations and systems related to fintech, as part of its efforts to promote the sector and achieve the targets of the financial sector development program, he added.

Meanwhile, Mohammed El-Kuwaiz, chairman, Capital Market Authority (CMA) highlighted the importance of innovation in fintech-related solutions in the capital market, adding that fintech enables the capital market to capitalize and reach out to more segments of companies and investors who previously had no access to the capital market.

"This technology has successfully delivered services to the largest possible number of people. We are excited about what fintech can provide for the capital market in terms of broadening its base of participants and beneficiaries."

El-Kuwaiz also indicated that fintech solutions are innovative by nature, and hence require tailored regulatory frameworks.

The CMA continues to motivate and enable entrepreneurs, with three rounds of licensing fintech companies completed, resulting in licensing of 15 firms in various domains, the chairman stated.

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