China growth recovery seen quickening in fourth quarter on policy support: Reuters poll

China growth recovery seen quickening in fourth quarter on policy support: Reuters poll

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Reuters.
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PHOTO:
Men
stand
on
a
balcony
overlooking
the
central
business
district
in
Beijing

By
Kevin
Yao

BEIJING
(Reuters)

China’s
economic
recovery
likely
accelerated
in
the
fourth
quarter,
driven
by
stronger
demand
at
home
and
abroad
and
policy
stimulus
which
is
expected
to
provide
a
solid
boost
into
2021.

The
world’s
second-largest
economy
is
expected
to
have
grown
6.1%
in
October-December
from
a
year
earlier,
after
the
third
quarter’s
4.9%
expansion,
the
median
forecasts
of
46
economists
polled
by
Reuters
showed.

The
economy
has
been
recovering
steadily
from
a
steep
6.8%
slump
in
the
first
three
months
of
2020,
when
an
outbreak
of
COVID-19
in
the
central
city
of
Wuhan,
first
detected
in
late
2019,
turned
into
a
full
blown
epidemic.

“The
good
performance
of
the
last
quarter
signaled
a
better
outlook
for
the
Chinese
economy
for
the
upcoming
2021,”
Alicia
Garcia
Herrero,
chief
economist
for
Asia
Pacific
at
Natixis,
said
in
a
note.

Some
analysts
cautioned
that
a
rebound
in
coronavirus
cases
in
China
and
renewed
lockdowns
in
some
areas
could
impact
consumption
heading
into
next
month’s
Lunar
New
Year
holidays.

On
a
quarterly
basis,
growth
likely
picked
up
to
3.2%
inOctober-December
from
2.7%
in
the
pervious
quarter,
the
poll
showed.

China
will
release
fourth-quarter
and
2020
gross
domesticproduct
(GDP)
data
on
Monday
(0200
GMT),
along
with
Decemberfactory
output,
retail
sales
and
fixed-asset
investment.

Industrial
output
may
have
grown
6.9%
in
December
from
a
year
earlier,
easing
from
a
7.0%
rise
in
November,
while
retail
sales
could
rise
5.5%
in
December,
quickening
from
November’s
5.0%.

Fixed-asset
investment
is
forecast
to
rise
3.2%
in
2020,
versus
2.6%
in
the
first
11
months,
according
to
the
poll.
Data
on
Thursday
showed
Chinese
exports
grew
by
more
than
expected
in
December,
as
coronavirus
disruptions
around
the
world
fuelled
demand
for
Chinese
goods
even
as
a
stronger
yuan
made
exports
more
expensive
for
overseas
buyers.

China’s
economic
growth
is
expected
to
quicken
to
8.4%
in
2021
from
2.1%
in
2020,
before
slowing
to
5.5%
in
2022,
as
the
central
bank
is
likely
to
keep
interest
rates
steady,
a
separate
Reuters
poll
showed.

While
the
predicted
growth
for
2021
would
be
the
strongest
reading
in
a
decade,
led
by
a
big
jump
in
the
first
quarter,
it
is
rendered
less
impressive
coming
off
the
low
base
set
last
year.

Chinese
leaders
at
a
key
agenda-setting
meeting
last
month
pledged
to
maintain
“necessary”
policy
support
for
the
economy
this
year,
avoiding
a
sudden
policy
shift.

China’s
central
bank
governor,
Yi
Gang,
said
last
week
it
would
prioritise
stable
monetary
policy
in
2021,
and
any
steps
to
exit
stimulus
measures
would
have
little
impact
on
the
economy,
Xinhua
news
agency
reported.

The
PBOC
has
rolled
out
a
raft
of
measures
since
early
2020
to
support
the
virus-hit
economy,
alongside
targeted
support
for
small
firms
and
increased
government
spending
on
infrastructure.

(Polling
by
Vivek
Mishra
and
Manzer
Hussain
in
Bengaluru
and
Jing
Wang
in
Shanghai;
Reporting
by
Kevin
Yao;
Editing
by
Simon
Cameron-Moore)

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