MNI POLICY: China Recovery To Accelerate In Q4: Stats Official

China's recovery will accelerate further in the last quarter as the rebound in investment is likely to continue and consumption strengthens amid improving employment, Fu Linghui, spokesman for the National Bureau of Statistics, said at a briefing on Monday.

Judging from investment's leading indicators, total planned investment in new projects grew 14.9% y/y in October, while funds already invested increased by 6% from January to October, Fu said.

Both services and offline consumption are recovering and growth in goods and online sales remains robust, Fu said, noting that catering revenue turned positive for the first time this year in October with a 0.8% y/y gain, while spending on necessities, cosmetic products, jewellery and cars maintained double-digit growth.

"Consumers' confidence to go out and spend is increasing…and their spending power is improving with increasing income and employment…the stimulating effect of consumption policy is kicking in," said Fu. He acknowledged that improving consumption further would require huge effort.

PRICES

Turning to China's foreign trade this year, he said it would do better than global trade, although there is some uncertainty given the growing impact of the pandemic's second wave on some western countries.

As for prices, the situation "has not undergone fundamental changes" with core CPI, excluding food and energy prices, stabilising at 0.5% for the fourth month, said Fu.

Fu downplayed the sharp deceleration in CPI growth to 0.5% in October from around 5% at the beginning of the year, attributing it to declining pork prices as well as the high base last Q4. However, he expects food and services prices to rise following holidays.