Silver lining in retail, but China economy remains unbalanced: BBVA

September 16, 2020

BEIJING - Economic activity indicators for August, including industrial production, fixed-asset investment and retail sales, all showed remarkable improvement from their previous month's readings -- and beat market consensus, according to the global financial services group, BBVA. Although China's recovery was still unbalanced, the silver lining was in retail sales, which entered positive expansion.

"Economic activity indicators for August all showed remarkable improvement from previous readings," BBVA says.

"To stimulate domestic demand, the policy focus will be on the new "dual circulation" growth model with a focus on "internal-circulation".

"We expect an unbalanced recovery to continue in the rest of this year and the economy still needs time to go back to the pre-COVID level.

"Although the uneven feature still exists, the silver lining is that retail sales entered into the expansionary track. From the policy perspective, the previous accommodating monetary and fiscal measures will continue to roll-out through the rest of the year, but large stimulus is not anticipated." (ATI).