HSBC Global Research: China's GDP in the third quarter increased by 4.9% year-on-year, and the recovery is steadily expanding

According to HSBC Global Research, although China’s GDP in the third quarter grew by 4.
9% year-on-year, which was lower than HSBC’s and general expectations, compared with the 3.
2% simultaneous growth in the second quarter, it is showing a steady recovery.
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According to September activity data, despite the slowdown in infrastructure investment growth, the recovery momentum in retail sales and industrial production is still stronger than expected.
HSBC Global Research predicts that as the Chinese government continues to relax its policies, it will support the continuous increase of private companies' spending in the coming months.
Although the GDP (4.
9%) in the third quarter was lower than HSBC (5.
4%) and generally expected (5.
5%), the year-on-year growth of the primary and secondary industries was 3.
9% and 5.
8%, respectively, slightly better than expected .
The tertiary industry brought surprises.
The third quarter saw a significant increase of 4.
3%, while the growth rate in the second quarter was only 1.
9%.
It is worth noting that the gap between the GDP growth rate in the third quarter and the non-commercial service industry output index growth rate has narrowed.
This is mainly due to non-commercial service industries, such as education, scientific research and comprehensive technical services, public utilities, social organizations, and medical care, social security, etc.
Due to the outbreak of the new crown epidemic, they have seen substantial growth in the first half of 2020, but are under epidemic control After stabilizing, growth will slow down in a few months, and its contribution to China's economic growth rate and GPD will also decline in the third quarter.
The non-commercial service industry is expected to grow by 4.
3% year-on-year in the third quarter, down from 10% in the second quarter and 17.
7% in the first quarter.
HSBC Global Research believes that compared with the previous quarter, the growth recovery in the third quarter tends to be more balanced.
In the context of an improvement in the labor market, household consumption is showing an upward trend.
At the same time, with the recent strong growth in medium and long-term corporate loans, manufacturing investment may further rebound in the next few months.
Although it is still too early to judge whether infrastructure investment has lost momentum, the financing of government infrastructure investment will weaken by 2021.
Given that private companies have not yet fully recovered, HSBC Global Research believes that the Chinese government may maintain loose policies in the near future.
In addition, China's fiscal and monetary policies should continue to support economic growth under the influence of external factors such as the global raging new crown epidemic and the US election.
It is expected that the deposit reserve ratio and the one-year deposit reserve ratio will be slightly lowered again before the end of the year.