China Economic Quarterly Q3 2020

China’s GDP growth reached 4.9% in Q3, and is expected to grow further in Q4 if the COVID-19 pandemic does not bounce back this winter.

This issue provides an overview of the macroeconomic trends in Q3 2020, some policy updates and hot topic analysis.



Here are some macro-economic highlights:

  1. GDP growth increased by 4.9% in Q3 and 0.7% for Q1-Q3
  2. Total fixed asset investment reached 44 trillion yuan and went up 0.8% for Q1-Q3
  3. Total real estate investment increased by 5.6% to 10 trillion yuan for Q1-Q3
  4. PMI remained above the threshold of 50% in Q3 and was slightly higher than in Q2 
  5. The growth of industrial added values increased by 1.2% for Q1-Q3
  6. Total retail sales of consumer goods increased by 0.9% in Q3
  7. Imports and exports unexpectedly increased by 7.5% in Q3
  8. PPI decreased by 2.0% and CPI went up 3.3% for Q1-Q3

Policy updates

Total aggregate financing to the real economy increased by 9.01 trillion yuan

According to the People’s Bank of China (PBoC), total aggregate financing to the real economy (AFRE) reached 29.62 trillion yuan during the first three quarters of 2020. This was 9.01 trillion yuan more than the same period last year. These proceeds will go towards stabilising private enterprise operations, safeguarding the labour market and providing additional direct assistance to the real economy. Total outstanding AFRE reached 280.07 trillion yuan by the end of September, and increased by 13.5% year-on-year.

Fiscal revenue increased by 4.7% in Q3, and reduced by 4.6% to 14.1 trillion yuan in the first nine months of the year

In the first three quarters of 2020, fiscal spending decreased by 1.9% to 17.51 trillion yuan, while fiscal revenue dropped by 4.6% year-on-year to 14.1 trillion yuan. The general public budget revenue dropped by 14.3% in Q1 and by 7.4% in Q2 year-on-year, and it increased by 4.7% in Q3 as the economy gradually recovered. Over the months of July, August and September, public budget revenue rose by 4.3%, 5.3% and 4.5% year-on-year respectively.

Hot topic analysis: China strives to become a developed country by 2035, according to the fifth plenary session

In 2020, the four-day fifth plenary session of the 19th Central Committee of the Communist Party of China (CPC) was concluded in Beijing on 29 October. One of the key outcomes of the plenary session was the formulation of the 14th Five-Year Plan (2021-2025) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035, which was based on proposals that were provided by the CPC Central Committee. These proposals map out a blueprint for China’s future economic and social development. Taking Shanghai city’s largest populated Pudong district as an example, which just celebrated its 30th anniversary of development and opening-up, we invite you to read more about the highlights and key outcomes of the plenary session.

  • The official statement generated during the fifth plenary session includes the following key topics: technology and innovation, real economy and manufacturing powerhouse, domestic market demand and new development pattern, opening up and socialist market economy, new urbanisation and rural revitalisation, national culture and soft power, green development and natural environment, and quality of life and social advancement.
  • According to different standards for a developed economy as defined by the World Bank, the Organisation for Economic Cooperation and Development (OECD) and the United Nations (UN), the mean GDP per capita for developed countries was slightly more than US$ 24,000 in 2019.
  • According to data from the UN and the International Monetary Fund, the total number of people in developed countries was around 884 million or 11.5% of the global population in 2019.
Implications and opportunities
  • China is expected to become a developed country by 2035. In fact, the GDP per capita in Shenzhen reached US$ 29,500 in 2019. By this standard, mega cities such as Shanghai and Beijing will also soon become developed economies.
  • With China’s population of 1.4 billion people, comprising around 18% of the global population in 2019, once the country becomes a developed economy this will dramatically alter the distribution of the world’s high-income population.
  • The definition of high-income or developed country is a relative concept. Thus the benchmark of what constitutes a high-income or developed country could possibly be adjusted in the future.

Contact us

Elton Yeung

Vice Chairman, PwC China

Tel: +[86] (10) 6533 8008

Thomas Leung

Managing Partner - Markets, PwC China

Tel: +[86] (10) 6533 2838 / +[852] 2289 8288

Elton Huang

Managing Partner, Central China Markets Leader, Shanghai Office Lead Partner, Entrepreneurial and Private Business Co-Leader, PwC China

Tel: +[86] (21) 2323 3029

G. Bin Zhao

Senior Economist, PwC China

Tel: +[86] (21) 2323 3681

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