China Market Insider “China is back in the black”
China’s economy is growing again, and the rapid recovery in high-tech manufacturing and engineering are two of the main reasons for this.
“Industrial production has accelerated, and especially advanced manufacturing and engineering has grown rapidly,” says an analysis of recent economic data from MaschinenMarkt (China).
In the first three quarters of this year, China’s gross domestic product grew by 0.7 % year-on-year according to the National Statistics Bureau in Beijing — despite a sharp Corona-lockdown-induced contraction in the first quarter. In the first three months of this year, GDP had shrunk by 6.8 %, but recovered to positive growth of 3.2 % in the second quarter and even grew by 4.9 % in the third quarter, which has now come to a close.
Companies in the manufacturing industry “above a designated size”, which usually refers to larger state-owned companies, made a particularly strong contribution in the third quarter to this success story of rapid recovery from the corona shock, which is probably unique in the world. They were able to increase their value added by 5.8 % in the three months up to the end of September — in the month of September alone they even increased their value added by 6.9 %, all year-on-year.
Even when broken down by individual industrial sectors, the picture for key economic sectors is sunny again. China’s entire manufacturing industry returned to positive growth of 1.7 % over the first nine months of 2020. This rapid comeback from the Corona low was supported by the good figures for advanced manufacturing (plus 5.9 %) and mechanical engineering (plus 4.7 %) in the third quarter.
Particularly striking was the recent quarterly growth in the production of trucks (plus 23.4), excavators and shovel equipment (plus 20.2), industrial robots (plus 18.2) and semiconductors (plus 14.7 %).
In short, the manufacturing industry in China is buzzing again, although the outlook for smaller companies and certain sectors is still far from rosy. In national surveys, however, managers in the People’s Republic as a whole are once again expressing great optimism about the economic development of their country. For example, the much-noticed industry barometer PMI, i.e. the index of purchasing managers, climbed to 51.5 % of optimistic assessments in September, which is again half a percentage point higher than in August.
It is true that in view of such fireworks of figures and success stories from real existing Chinese socialism, long-time observers of China repeatedly remind us that under communism statistics are considered a tool in the service of the party, i.e. in case of doubt they are more committed to the party and its leaders than to the truth. This warning must be heeded both in Chinese corona infection figures and in economic statistics.
However, leading economists around the world are largely agreed that the industrial key data of Chinese statisticians — although glossed over here and there with political intent — on the whole correctly reflect the economic trend. And the trend for the manufacturing industry in China is once again pointing in only one direction: steeply upwards.