China showed signs of recovery by announcing this Monday by surprise that its gross domestic product (GDP) grew by 3.9% year-on-year in the third quarter of the year. The data, better than expected, reflects a notable improvement after a precarious second quarter in which it only expanded by 0.4% due to the strict confinement suffered by Shanghai, the country's financial engine, and other important cities.
So far this year, the cumulative increase in Chinese GDP between January and September stands at 3%. The data is far from the 5.5% that its authorities set as a goal at the beginning of the year, which for months already considered it unattainable, and now it is around the latest predictions made for the country by the International Monetary Fund (3.2% throughout the year) or the World Bank (2.8%).
The Chinese National Statistics Office (ONE) should have published this data last Tuesday the 18th, when the 20th congress of the Communist Party was held in Beijing to renew the mandate of its leader, Xi Jinping, and reform its leadership. However, he abruptly and surprisingly postponed it without offering explanations or a new date, which raised suspicions.
Later, anonymous sources from Bloomberg pointed out that the delay was due to the fact that those who had to sign the physical documents for the publication of the data were isolated in the mandatory "anti-covid bubble" for all congress attendees, which ended this weekend. of week. That the GDP or foreign trade data were published on the first working day after the appointment is consistent with this theory.
The ONE also published today other official data for September such as industrial production (6.3% year-on-year), retail sales (2.5%) or the official urban unemployment rate, which went from 5.3% to 5.5 %.
For its part, the General Administration of Customs also pointed out today that the value of trade exchanges denominated in yuan between China and the rest of the world grew by 8.3% year-on-year in September. Specifically, exports increased by 10.7%, while imports expanded by 5.2%.
Despite the recent good results, the Chinese economy continues to face enormous challenges, such as the continuation of its covid-zero strategy, which causes confinements and stoppages in production or logistics without prior notice.
Without going any further, this Monday the temporary suspension of face-to-face classes and meals inside restaurants in a district of Guangzhou was announced, which fueled concerns about a possible interruption in the production of one of the main manufacturing centers. from the country.
“The outlook remains grim,” analyzed Julian Evans-Pritchard of Capital Economics. “There is no prospect of China lifting its covid-zero policy in the near future, and we do not expect any significant easing before 2024. Disruptions will therefore continue to weigh on people's activity and large-scale lockdowns cannot be ruled out. scale," he added.
Added to these problems is a real estate sector in crisis, with falling prices and half-finished promotions that do not start due to lack of capital, or the pressures generated on external demand by the war in Ukraine or the inflation that affects the big economies.
During his speech this Sunday after being re-elected for a third term in office, President Xi assured that his country plans to continue opening up to the outside world and creating opportunities for the rest of the world through its own development. "China cannot develop without the world, and the world also needs China," he said in front of the press.
However, his policies in recent years and the reinforcement of his power that this congress has meant point rather towards an ever-increasing intervention of the State in the economy.
The almighty Chinese leader prioritizes national security and social stability over growth. Under his baton, he has increased the weight of the powerful public sector against private initiative. Flagship sectors such as technology have been subjected to deep scrutiny and remodeling that has taken away great fortunes and thousands of jobs.
In its search for "common prosperity" and "quality" growth, everything indicates that this control will increase in the future and could expand to other areas.
"What I see in this document (Xi's congress opening speech, which sets out the political lines for the coming years) is a reaffirmation of that right to intervene," Kevin Rudd, a former Australian prime minister, remarked at a recent forum. and current president of the Asia Society.
