A most remarkable, and likely singular, turnaround

China’s economy has continued its remarkable turnaround over the past three months, recording the strongest GDP growth since the pandemic started. Unlike in Q2 when economic growth surprised on the upside by expanding by 3.2% y/y, economic growth in Q3 matched our expectations by recording growth of 4.9% y/y.

Evidently, economic resumption has been steady. Since bottoming in February, our gauge of economic activity – based on more than a dozen high-frequency macroeconomic data points – has improved consistently, from -7.6% in February to +5.5% in September – the highest level since December 2019.