China's economy grew 4.9 percent on-year in the third quarter, sustaining its rebound from bruising virus lockdowns and moving closer to pre-pandemic levels, official data showed Monday.

But the world's second-largest economy grew slightly below expectations in the July-September period, National Bureau of Statistics (NBS) data showed, which warned of uncertainty ahead as "the international environment is still complicated".

China's recovery has so far put it on track to be the only major economy expanding this year, according to International Monetary Fund forecasts, while nations around the world continue to struggle with lockdowns and new waves of infections.

Analysts polled by AFP earlier pegged third-quarter growth in China, where the coronavirus first surfaced, at 5.2 percent from a year ago, up from the second quarter's 3.2 percent rise.

NBS data also showed retail sales grew faster than expected in September at 3.3 percent, up from 0.5 percent growth on-year the month before.

But this still lagged behind industrial output growth, which came in stronger than expected at 6.9 percent from a year ago last month.

China's Communist leadership has hailed its handling of the virus, giving experimental vaccines to hundreds of thousands of its citizens as it seeks to reframe the pandemic's origin story.

People in China are back out shopping, travelling and eating -- in stark contrast to many other parts of the world.

But long-term fears over jobs and a potential virus rebound in China are weighing on consumer sentiment, despite government attempts to reignite domestic demand.

"China built its quick recovery via stringent lockdowns, massive testing, population tracking and fiscal stimulus," Nomura chief China economist Lu Ting told AFP.

Other factors such as export growth and a surge in demand after massive floods in the summer also boosted activity in September, he added.

But "China is not absolutely free from the risk of a second wave of Covid-19, pent-up demand will likely lose some steam... and rising US-China tensions could dent China's exports and manufacturing investment."

NBS spokeswoman Liu Aihua said Monday that although China's economy has continued its steady recovery, the global picture is murky "with considerable instabilities and uncertainties".

She highlighted "great pressure" in forestalling virus cases from abroad and preventing a virus resurgence at home.

Meanwhile, the urban unemployment rate dipped further to 5.4 percent in September, although fixed-asset investment growth turned positive for the first time in 2020.

Asian markets rise on US stimulus hope, China growth falls short
Hong Kong (AFP) Oct 19, 2020 - Asian markets rose Monday on lingering hopes for a new US stimulus package, though Shanghai and Hong Kong pared their initial rallies after data showed China's economy grew at a slower pace than forecast.

With a little over two weeks until the November 3 elections, time is running out for US lawmakers to reach an agreement on much-needed coronavirus support but talks remain bogged down.

At the weekend House Speaker Nancy Pelosi set a Tuesday deadline for a pact to be hammered out, while Donald Trump urged his Republican party to offer more than the $1.8 trillion they have put forward, adding that he would be willing to go higher than the Democrats' $2.2 trillion proposal.

The president on Sunday said: "I want at a bigger number" than Pelosi. "That doesn't mean all the Republicans agree with me but I think they will in the end."

That came a day after he said he "could quickly convince" his party to back a "good" deal.

"If you said a trillion-eight, if you said two trillion, if you said two trillion-two -- many numbers -- I'm willing to go higher than that," he told a Milwaukee-based TV station.

"I will take care of that problem in two minutes."

Pelosi and Treasury Secretary Steven Mnuchin held talks over the weekend and plan to hold more on Monday.

Analysts said, however, that expectations are high that even if nothing is agreed before the vote, lawmakers will eventually pass a new rescue bill.

"It seems that the market is optimistic that indeed stimulus will follow whether that is tax cuts under a Trump presidency or spending under a (Joe) Biden presidency," Ben Emons, at Medley Global Advisors, told Bloomberg TV.

Tokyo, Sydney and Taipei all rose more than one percent wile Seoul, Singapore, Manila and Jakarta were also well up.

Hong Kong gained 0.9 percent and Shanghai put on 0.3 percent but the gains shallowed after China released figures showing the world's number two economy expanded at a slower rate than expected in July-September.

The 4.9 percent rate was short of the 5.2 percent tipped by analysts in an AFP poll, though it was a big improvement on the previous quarter, helped by a big increase in retail sales that suggests consumers are growing more confident as the virus subsides in China.

Officials also cautioned of uncertainty ahead as "the international environment is still complicated".

Still, observers said the sales data bodes well for fourth-quarter growth.

- Second wave worries -

While China continues to see improvements as it emerges from painful virus lockdowns, there are concerns Europe's recovery will be thrown off track by a second wave of infections that is forcing several countries to reintroduce containment measures.

However, Axi's Stephen Innes said the economic pain would likely not be as bad as earlier this year.

"The scope of the current mobility restrictions in Europe is nowhere near the magnitude of those that brought the world economy to a sudden stop," he said in a note.

"Back then, there was no real option other than to shut everything down, but the medical community has learned a lot about the complete lockdown data, to the extent where targeted measures can be applied that would have less of an impact on the economy and still significantly reduce infections.

"So, if the curve flattens in the next four to six weeks, it could be back to the reopening narrative."

The pound edged up slightly but traders remain on edge over the possibility that Britain and the European Union will not reach a trade agreement after Prime Minister Boris Johnson last week said he was ready to walk away without one.

With the two sides blaming each other for a lack of movement, senior British minister Michael Gove said Sunday he was still hopeful there would be a deal, telling TV interviewers the door remained "ajar" if the EU would change its position.

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China's economy to pick up pace in Q3: AFP poll
Beijing (AFP) Oct 17, 2020
China's economic recovery gathered pace in the third quarter, according to an AFP poll of analysts, with consumer spending gradually picking up as coronavirus fears eased, helping a wider rebound spurred by investment and exports. Growth in July-September is expected to come in at 5.2 percent when official data is released Monday, bringing the world's second-largest economy closer to last year's 6.1 percent annual expansion, even as countries around the world struggle to contain the deadly pandemic. ... read more