China’s economic recovery reached new heights as retail sales rose above 2019 levels last month for the first time this year.
Shoppers’ enthusiasm pushed sales up by 0.5pc compared with August of last year, though this is not yet enough to make up for lost purchases through the pandemic months.
As in the UK, sales have shifted online. Internet shopping accounts for one quarter of sales, with volumes up more than 15pc on the year.
The pandemic has also left its mark on the type of goods in demand, with communications kit performing well but petrol sales down on the year.
Economist Xiangrong Yu at Citi said the rise in sales to above 2019 levels represented a “milestone” in the recovery, with more growth to come.
“As public health conditions improve, more consumer sectors like movie theatres are back in business. The upcoming golden week of National Day Holiday can be another catalyst for the recovery of travel and tourism,” he said.
“Looking ahead, despite the risks surrounding US-China tensions, income growth and external demand, we think the momentum for organic growth has enhanced and the impact of the stimulus is yet to fully materialise.”
At the same time industrial production in the world’s second-largest economy climbed again so is now 5.6pc bigger than it was a year ago.
Investment in infrastructure is close to 2019 levels, with spending on computers and telecoms more than 11pc above last year’s size.
“We can see that domestic demand has brought back growth, mainly in retail sales and infrastructure projects, which have in turn led to growth in industrial production. This growth has brought some jobs back to the market,” said Iris Pang, economist at ING.
Foreign demand for China’s goods has been shaky, with worries over the coronavirus outbreaks in Europe adding to risks.
However the ZEW survey of investors indicates there is room to hope the economy in Germany will recover anyway.
The survey, which measures expectations for future growth, hit a 20-year high in September, suggesting a strong recovery could be on the cards.