China showed ‘significant’ rebound in Q3 but faces challenges

BEIJING, Oct 17 (Reuters) – China’s economy rebounded significantly in the third quarter and employment remained broadly stable even amid continued headwinds, a senior official with the state planner said on Monday.

Policymakers have rolled out a series of measures to support the world’s second-largest economy, which narrowly escaped a contraction in the second quarter as tight COVID restrictions and a worsening housing crisis weigh on the outlook.

“The economy recovered significantly in the third quarter,” Zhao Chenxin, deputy head of the National Development and Reform Commission, said at a press conference during the Communist Party Congress which takes place once every five years.

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“Consumer prices rose slightly, in stark contrast to high global inflation, and employment remained generally stable.”

China will delay the release of third-quarter GDP and September activity data originally scheduled for release to 10:00 a.m. local time (0200 GMT) on Tuesday, according to an updated schedule on the statistics bureau’s website. No explanation was given.

The GDP data was eagerly awaited by investors, after an unexpected delay in trade figures due for release on Friday.

China’s economy likely grew 3.4% in July-September from a year earlier, accelerating from 0.4% growth in the second quarter, but expected growth for 2022 could still be lower. one of the lowest in nearly half a century, according to a Reuters poll. .

Policymakers have rolled out more than 50 economic support measures since late May, channeling more money into infrastructure projects and cutting taxes for businesses.

The recovery will be consolidated as the effects of macroeconomic policies continue to be felt, said Zhao, who acknowledged that the economy still faces multiple headwinds.

“Influenced by changes in the external and internal environment, there are still contradictions and outstanding issues in economic operation, and economic development still faces many difficulties and challenges,” he said.

In an environment of low consumer and business confidence, companies are reluctant to expand and hire more workers. The national survey-based unemployment rate fell slightly to 5.3% in August from 5.4% in July. Youth unemployment remained high at 18.7%, after hitting a record high of 19.9% ​​in July.

President Xi Jinping touted the fight against COVID-19 as he kicked off the party congress by focusing on security and reiterating policy priorities on Sunday, suggesting tough COVID restrictions won’t be eased anytime soon .

China will take steps to stabilize its supply chains and step up policies to attract foreign investment, especially in the manufacturing sector, Zhao added.

Other senior government officials pledged at the press conference to significantly increase domestic energy supply capacity and further increase spare capacity for major commodities.

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Additional reporting by Liangping Gao; Editing by Christopher Cushing, Ana Nicolaci da Costa and Lincoln Feast

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