The Conference Board China Economy Watch (Sep 2020 Data) | The Conference Board
The Conference Board uses cookies to improve our website, enhance your experience, and deliver relevant messages and offers about our products. Detailed information on the use of cookies on this site is provided in our cookie policy. For more information on how The Conference Board collects and uses personal data, please visit our privacy policy. By continuing to use this Site or by clicking "OK", you consent to the use of cookies. 


The Conference Board China Economy Watch (Sep 2020 Data)
  • Impact of COVID-19 Crisis on the Chinese Economy – China’s GDP growth accelerated to from 3.2 percent y-o-y in Q2 to 4.9 percent in Q3. The consumption recovery still lags industrial production growth by a wide margin. To restore pre-COVID economic normalcy, consumption and services growth must substantially recover. Pandemic impacts, though diminishing, will continue to drag on growth into 2021. China’s economic recovery should nonetheless sustain through 2021, but growth momentum will likely be weaker than Q2 and Q3 of this year.
  • Investment Trends – In September, YTD Fixed Asset Investment (FAI) growth turned positive for the first time this year. Very strong corporate loan growth in recent months should extend FAI recovery over the short term. Housing market data in September suggest property investment growth is peaking. Growth in infrastructure investment is moderating, but we still expect a strong rebound in infrastructure investment in 2021.
  • Consumption Trends – Retail sales growth accelerated in August and September. Demand in consumer services is picking up. But, due to the slow labor market recovery, and its impact on household income growth, household spending growth will remain sub-par over the short term.  
  • Trade Trends – China’s trade data remain upbeat, but the near-term outlook is clouded by strong COVID resurgence globally. In October, the PBOC took steps to curb RMB appreciation. This should cap the rally in the RMB that has persisted since May

Implications for Business

With public life nearly back to normal in most parts of China, the country’s economic recovery is entering a second stage. The trajectory looking forward will depend mostly on consumption and the restart and new establishment of small-sized services businesses. The first stage recovery, driven by industrial production resumption and stimulus-backed investment, has largely run its course. There is little headroom for more growth pickup in industrial production unless a consumption recovery creates new demand. Full consumption recovery will be slow coming. The damage to household balance sheets caused by COVID – job loss, income reduction, the spending down of savings, etc. – will take time to repair. Recovery in the small-sized enterprise space – consumer services companies in particular – will be critical to full recovery. Given that many of these businesses went bankrupt in Q1 and Q2, the sector will take considerable time to reanimate. It will be important to see whether the forthcoming 14th Five Year plan will introduce measures to address this critical economic weakness.

Note: Member businesses in China are driven, in general, by one or more of three key economic factors: Investment, Consumption and Trade. Our monthly “China Economy Watch” analysis assesses each factor in turn to inform business planning and forecasting.


For access to the full report, please contact our research or membership staff listed on the last page of the downloabable Executive Summary PDF.




Yuan Gao

Senior Economist, China Center for Economics and Business
The Conference Board

Support Our Work

Support our nonpartisan, nonprofit research and insights which help leaders address societal challenges.