The Chinese economy has continued the V-shape recovery due to its "first-in, first-out" of the Covid-19 pandemic, with Q3 GDP picked up significantly to 4.9% y/y from 3.2% y/y in Q2. Meanwhile, the uneven feature of recovery that the demand side lags behind the supply side is significantly mitigating.

The economic recovery gives the authorities more confidence to continue to normalize monetary and fiscal policies in the rest of the year. The strong Q3 GDP growth at 4.9% y/y indicates the V-shape recovery continues in China. Due to China’s “first-in, first-out” of Covid-19, Chinese economic growth will be the only positive growth rate among the main economies this year, the only silver lining amid the global recession.

The uneven recovery feature that the supply side lags behind the demand side has been mitigating in Q3 as the economy further normalizes. On the other hand, the exports have shown a strong resilience, supported by the pandemic-related shipments; however, we need to be cautiously positive on its sustainability.Chinese authorities are trying to normalize the previous monetary and fiscal measures in 2H 2020 amid better-than-expected growth recovery.

The new growth model of “dual circulation” with the focus of “internal circulation” will be the main strategy of Chinese authorities to deal with the new global circumstances. While The 14th Five Year Plan which will be announced in the coming 19th Poliburo meeting at the end-October will be the blueprint of the next five years.

Download The Full China Economic Outlook

This document was prepared by Banco Bilbao Vizcaya Argentaria’s (BBVA) Research Department on behalf of itself and its affiliated companies (each a BBVA Group Company) for distribution in the United States and the rest of the world and is provided for information purposes only. The information, opinions, estimates and forecasts contained herein refer to that specific date and are subject to changes without notice due to market fluctuations. The information, opinions, estimates and forecasts contained in this document have been gathered or obtained from public sources believed to be correct by the Company concerning their accuracy, completeness, and/or correctness. This document is not an offer to sell or a solicitation to acquire or dispose of an interest in securities.

Feed news

Latest Forex Analysis

Latest Forex Analysis

Editors’ Picks

EUR/USD holds above 1.22 as the dollar slides across the board

EUR/USD has extended its gains and has topped 1.22, the highest since February. The safe-haven dollar is weakening amid the risk-on mood and as the Fed sticks to its dovish policy. US housing figures were mixed. The Fed's Bostic is set to speak later. 


GBP/USD extends corrective slide below 1.4200

GBP/USD trades around 1.4180, retreating from 1.4219, the highest since February. Britain's unemployment rate surprisingly dropped to 4.8% as the reopening continues. The dollar is on the back foot amid the upbeat market mood.


XAU/USD consolidates below $1870 amid risk-on mood

Gold price has entered a phase of upside consolidation, having faced rejection once again above $1870. The gold price looks unimpressed by the latest leg down in the US dollar, amid dovish Fed expectations.

Gold News

SEC attempts to block XRP holders from presenting evidence in Ripple case

The Securities & Exchange Commission filed another objection to the motion to intervene by XRP holders. The government agency argues that allowing third-party defendants into the case would “sow chaos” into the litigation.

Read more

Coinbase reveals intention to raise $1.25 billion following direct listing

Since its debut on the Nasdaq, Coinbase’s share price has merely collapsed. Given the recent weakness in its stock price, the leading cryptocurrency exchange is looking for a further cash injection. 

Read more