China Economy in a Snapshot Q4 2020 Report





Economic Outlook

China’s short- and medium-term economic recovery will continue to be shaped by the COVID-19 pandemic before vaccines become available. The country is now coping well, allowing economic activity to return to normal, underpinned by domestic demand. Indeed, with the exception of a few minor breakouts that have affected China’s provincial economies, the number of newly affected cases has grown by no more than double digits in the past three months. However, since the global economic outlook remains uncertain due to a resurgence of the pandemic in major economies, notably in Europe, weak external demand is likely to continue in H2 2020.

The unadjusted CEIC leading indicator rose slightly from 107.83 in May to 109.74 in June before stabilising at 109.82 in July and 109.20 in August. In contrast, the smoothed CEIC indicator has shown consistent improvement since declining to a low of 84.24 in January, reaching 113.30 in August from 108.77 in July.


Retail sales of consumer goods returned to positive year on year growth of 2.3% in August, for the first time this year, but are not expected to regain their pre-pandemic levels by the end of the year. Given the persistent fear of new COVID-19 outbreaks and ongoing social distancing, many households are still limiting their spending on non-essential items. Industries such as catering, accommodation and aviation are suffering as a result.