China Power Crunch Hits GDP Growth

SHANGHAI — China’s economic growth continued to decelerate in the third quarter, as gross domestic product came in at 4.9%, softened by the country’s zero-tolerance COVID measures and energy shortages.

The year-on-year GDP growth rate, published on Monday by the National Bureau of Statistics for the three-month period through September, was below the median 5% expansion forecast by 29 economists in a Nikkei poll released earlier this month.

The figure slid from 7.9% for the April-to-June quarter, weighed down by high commodity prices amid uncertainty kindled by the China Evergrande Group’s debt crisis, which is piling risk onto the property and banking sectors.

The reading also reflects weak overall activity, including in manufacturing and consumer spending. Retail sales of consumer goods, a barometer of household spending, edged up by 4.4% in September, compared to 2.5% in August, but was still well below the double-digit growth that had continued till June.

Certain factors have persuaded economists to be cautious, at least for the near term. Rising coal prices are hitting the profitability of electricity providers, making the utilities reluctant to generate power. As it prioritizes supplying power to sectors that touch everyday life, the government is capping supplies to the steel, cement and other energy-intensive industries. The result has been less production and more inflation.

The statistics office last week announced that the producer price index for manufactured goods in September rose by 10.7% from a year earlier, the strongest surge in the past 25 years, as far back as comparable data goes.

The government forecasts China’s economy to grow 6% for all of 2021, the International Monetary Fund projects 8% and the Asian Development Bank 8.1%.

The economy expanded 9.8% in the first nine months of the year, largely driven by trade as both exports and imports jumped nearly 23% in yuan terms.

Service sector growth of 19.3%, led by software and information technology services, also stoked the nine-month expansion.

The statistics office said GDP grew 0.2% in the third quarter from the previous three months, which the U.K.’s Capital Economics noted is the second lowest since China began revealing such data in 2010.

Growth lost more steam in September as industrial production slid to 3.1% from 5.3% in August, while the official manufacturing Purchasing Managers’ Index fell to 49.6. It slipped below 50 — which the statistics office says “reflects the overall economy is in recession” — for the first time since February 2020.

Meanwhile, officials have been playing down the country’s power crunch and worries over the Evergrande crisis.

“The energy supply shortage is temporary, and its impact on the economy is controllable,” Fu Lingxuan, the National Bureau of Statistics’ spokesperson told reporters on Monday, citing recent measures to boost coal supply.

Zou Lan, head of financial markets at the country’s central bank, said Evergrande had “blindly diversified and expanded business,” urging the property group to offload assets to raise funds to pay off debts.

“The risk exposure of individual financial institutions to Evergrande is not big and the spillover effect for the financial sector is controllable,” Zou said on Friday.

While fallout from the power shortages and concerns over the property market may have eased from September, their impact on China’s broader economy should not be underestimated and will be a major downside risk in the fourth quarter, warned Shanghai-based Yue Su, principal economist at The Economist Intelligence Unit.

“The slowdown in the property sector will affect the activities of firms in areas such as construction contracting, building materials and home furnishing,” said Su, adding that energy-intensive industries will face rising costs as well.

Hong Kong-based Tommy Wu of Oxford Economics said policymakers are likely to take more steps to shore up growth, including ensuring ample liquidity in the interbank market, accelerating infrastructure development and relaxing some aspects of overall credit and real estate policies.

And not all economists agree with China’s official data.

Julian Evans-Pritchard of U.K.-based Capital Economics said the research firm’s in-house measure, the China Activity Proxy, tracked a sharp 3.9% quarter-on-quarter contraction in the third quarter, compared to a 3.0% expansion in the previous quarter.

“For now, the blow from the deepening property downturn is being softened by very strong exports,” said Evans-Pritchard. “But over the coming year, foreign demand is likely to drop back as global consumption patterns normalize coming out of the pandemic and backlogs of orders are gradually cleared.”

The benchmark Shanghai Composite Index dropped as much as 0.92% on Monday morning, before closing for the midday break down 0.35%.

By:

Source: China power crunch hits GDP growth – Nikkei Asia

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IMF Cuts Global Growth Forecast Amid Supply Chain Disruptions, Pandemic Pressures

The IMF, a grouping made up of 190 member states, promotes international financial stability and monetary cooperation. It also acts as a lender of last resort for countries in financial crisis.

In the IMF’s latest World Economic Outlook report released on Tuesday, the group’s economists say the most important policy priority is to vaccinate sufficient numbers of people in every country to prevent dangerous mutations of the virus. He stressed the importance of meeting major economies’ pledges to provide vaccines and financial support for international vaccination efforts before new versions derail. “Policy choices have become more difficult … with limited scope,” IMF economists said in the report.

The IMF in its July report cut its global growth forecast for 2021 from 6% to 5.9%, a result of a reduction in its projection for advanced economies from 5.6% to 5.2%. The shortage mostly reflects problems with the global supply chain that causes a mismatch between supply and demand.

For emerging markets and developing economies, the outlook improved. Growth in these economies is pegged at 6.4% for 2021, higher than the 6.3% estimate in July. The strong performance of some commodity-exporting countries accelerated amid rising energy prices.

The group maintained its view that the global growth rate would be 4.9% in 2022.

In key economics, the growth outlook for the US was lowered by 0.1 percentage point to 6% this year, while the forecast for China was also cut by 0.1 percentage point to 8%. Several other major economies saw their outlook cut, including Germany, whose economy is now projected to grow 3.1% this year, down 0.5 percent from its July forecast. Japan’s outlook was down 0.4 per cent to 2.4%.

While the IMF believes that inflation will return to pre-pandemic levels by the middle of 2022, it also warns that the negative effects of inflation could be exacerbated if the pandemic-related supply-chain disruptions become more damaging and prolonged. become permanent over time. This may result in earlier tightening of monetary policy by central banks, leading to recovery back.

The IMF says that supply constraints, combined with stimulus-based consumer appetite for goods, have caused a sharp rise in consumer prices in the US, Germany and many other countries.

Food-price hikes have placed a particularly severe burden on households in poor countries. The IMF’s Food and Beverage Price Index rose 11.1% between February and August, with meat and coffee prices rising 30% and 29%, respectively.

The IMF now expects consumer-price inflation in advanced economies to reach 2.8% in 2021 and 2.3% in 2022, up from 2.4% and 2.1%, respectively, in its July report. Inflationary pressures are even greater in emerging and developing economies, with consumer prices rising 5.5% this year and 4.9% the following year.

Gita Gopinath, economic advisor and research director at the IMF, wrote, “While monetary policy can generally see through a temporary increase in inflation, central banks should be prepared to act swiftly if the risks to rising inflation expectations are high. become more important in this unchanged recovery.” Report.

While rising commodity prices have fueled some emerging and developing economies, many of the world’s poorest countries have been left behind, as they struggle to gain access to the vaccines needed to open their economies. More than 95% of people in low-income countries have not been vaccinated, in contrast to immunization rates of about 60% in wealthy countries.

IMF economists urged major economies to provide adequate liquidity and debt relief for poor countries with limited policy resources. “The alarming divergence in economic prospects remains a major concern across the country,” said Ms. Gopinath.

By: Yuka Hayashi

Yuka Hayashi covers trade and international economy from The Wall Street Journal’s Washington bureau. Previously, she wrote about financial regulation and elder protection. Before her move to Washington in 2015, she was a Journal correspondent in Japan covering regional security, economy and culture. She has also worked for Dow Jones Newswires and Reuters in New York and Tokyo. Follow her on Twitter @tokyowoods

Source: IMF Cuts Global Growth Forecast Amid Supply-Chain Disruptions, Pandemic Pressures – WSJ

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Why Managers Fear a Remote-Work Future

In 2019, Steven Spielberg called for a ban on Oscar eligibility for streaming films, claiming that “movie theaters need to be around forever” and that audiences had to be given “the motion picture theatrical experience” for a movie to be a movie. Spielberg’s fury was about not only the threat that streaming posed to the in-person viewing experience but the ways in which the streaming giant Netflix reported theatrical grosses and budgets, despite these not being the ways in which one evaluates whether a movie is good or not.

Netflix held firm, saying that it stood for “everyone, everywhere [enjoying] releases at the same time,” and for “giving filmmakers more ways to share art.” Ultimately, Spielberg balked, and last month his company even signed a deal with Netflix, likely because he now sees the writing on the wall: Modern audiences enjoy watching movies at home.

In key ways, this fight resembles the current remote-work debate in industries such as technology and finance. Since the onset of the coronavirus pandemic, this has often been cast as a battle between the old guard and its assumed necessities and a new guard that has found a better way to get things done.

But the narrative is not that tidy. Netflix’s co-founder and CEO, Reed Hastings, one of the great “disruptors” of our age, deemed remote work “a pure negative” last fall. The 60-year-old Hastings is at the forefront of an existential crisis in the world of work, demanding that people return to the office despite not having an office himself. His criticism of remote work is that “not being able to get together in person” is bad.

Every business leader should ask themselves a few questions before demanding that their employees return to the office:

  1. Prior to March 2020, how many days a week were you personally in the office?
  2. How many teams did you directly interface with? What teams did you spend the most time with?
  3. Do you have an office? If you don’t, why not?
  4. What is office culture?
    1. What is your specific office’s culture?
  5. Has your business actually suffered because of remote work?
    1. If so, how? Be specific.

Some of the people loudly calling for a return to the office are not the same people who will actually be returning to the office regularly. The old guard’s members feel heightened anxiety over the white-collar empires they’ve built, including the square footage of real estate they’ve leased and the number of people they’ve hired. Earlier this year, Google’s parent company, Alphabet, rolled out an uneven return-to-office plan for its more than 130,000 employees—the majority of workers must soon come back to the office three days a week, while others are permitted to keep working exclusively from home. One senior executive at the company has even been allowed to work remotely from New Zealand.

Remote work lays bare many brutal inefficiencies and problems that executives don’t want to deal with because they reflect poorly on leaders and those they’ve hired. Remote work empowers those who produce and disempowers those who have succeeded by being excellent diplomats and poor workers, along with those who have succeeded by always finding someone to blame for their failures. It removes the ability to seem productive (by sitting at your desk looking stressed or always being on the phone), and also, crucially, may reveal how many bosses and managers simply don’t contribute to the bottom line.

I have run my own remote company that operates at the intersection of technology, media, and public relations since 2013. I retained an office for a year or so that I got rid of because it was really just a place to meet before going off to have drinks. For seven years before the pandemic, some of my peers showed concern that my business “wouldn’t succeed without an in-person team.”

Some people really do need to show up in person. I live in Las Vegas, a city of more than 600,000 people with more than 200,000 hospitality workers, and thus I’m keenly aware of which tasks require someone to physically be there to complete them. You can’t wash dishes over Zoom. You can’t change bed sheets over Slack. Blue-collar workers are the backbone of the city, as well as the Consumer Electronics Show that the tech elite uses to champion code-based products. Local hospitality workers suffered painfully during the pandemic as tourism in the city dried up, because their jobs depend on thriving physical spaces.

But for the tens of millions of us who spend most of our days sitting at a computer, the pandemic proved that remote work is just work. Every company that didn’t require someone to physically do something in a specific place was forced to become more efficient on cloud-based production tools, and the office started to feel like just another room with internet access.

While many executives and managers spent the early months of the pandemic telling their employees that “remote work wouldn’t work for us in the long term,” they are now forced to argue with the tangible proof of their still-standing business, making spurious statements like “We’ll miss the office culture and collaboration.”

Now, with the coronavirus’s Delta variant threatening to delay many companies’ return-to-office plans, the value of in-person work faces an even greater test. If you have unvaccinated kids or live with an immunocompromised person, is risking your family’s safety worth experiencing “serendipitous conversation” with your colleagues?

Should you ever go back to the office?

Last fall, 94 percent of employees surveyed in a Mercer study reported that remote work was either business as usual or better than working in the office, likely because it lacks the distractions, annoyances, and soft abuses that come with co-workers and middle managers. Workers are happier because they don’t have to commute and can be evaluated mostly on their actual work rather than on the optics-driven albatross of “office culture,” which is largely based on either the HR handbook or the pieces of the HR handbook your boss chooses to ignore.

The reason working from home is so nightmarish for many managers and executives is that a great deal of modern business has been built on the substrate of in-person work. As a society, we tend to consider management a title rather than a skill, something to promote people to, as well as a way in which you can abstract yourself from the work product.

When you remove the physical office space—the place where people are yelled at in private offices or singled out in meetings—it becomes a lot harder to spook people as a type of management. In fact, your position at a company becomes more difficult to justify if all you do is delegate and nag people.

When we are all in the same physical space, we are oftentimes evaluated not on our execution of our role but on our diplomacy—by which I mean our ability to kiss up to the right people rather than actually being a decent person. I have known so many people within my industry (and in others) who have built careers on “playing nice” rather than on producing something.

I have seen examples within companies I’ve worked with of people who have clearly stuck around because they’re well liked versus productive, and many, many people have responded to my newsletters on the topic of remote work with similar stories. I’ve also known truly terrible managers who have built empires, gaining VP and C-level positions, by stealing other people’s work and presenting it as their own, something that, according to research, is the No. 1 way to destroy employee trust.

These petty fiefdoms are far harder to maintain when everyone is remote. Although you may be able to get away with multiple passive-aggressive comments to colleagues in private meetings or calls, it’s much harder to be a jerk over Slack, email, and text when someone can screenshot it and send it to HR (or to a journalist).

Similarly, if your entire work product is boxing up other people’s production and sending it to the CEO, that becomes significantly harder to prove as your own in a fully digital environment—the producer in question can simply send it along themselves. Remote work makes who does and doesn’t actually do work way more obvious.

Even if we’re discussing some sort of theoretical, utopian office in which everybody is contributing and everyone gets along, each day during which a business doesn’t fail because of going remote proves that the return-to-office movement is unnecessary. Those in power who claim that remote work is unworkable are delaying an inevitable remote future by using logic that mostly comes down to “I like seeing the people I pay for in one place.” I have yet to read one compelling argument for a company that has gone remote to fully return to the office, mostly because the reasoning is rooted in control and ego.

We have lionized the founders, CEOs, and disruptors who nevertheless have intra-office reputations as abrasive geniuses who treat their workers as eminently replaceable. Because most private companies don’t share revenue, we frequently tie headcount and real estate to success. Removing the physical office forces modern businesses to start justifying themselves through annoying things such as “profit and loss” and “paying customers.”

When you hire someone, you’re (supposedly) hiring them to do a job in exchange for money. But the anti-remote crowd seems to believe that the responsibility of a 9-to-5 employee isn’t simply the work but the appearance, optics, and ceremony of the work. Abusive work cultures grow from this process too.

Making people work late is much harder when you can’t trap them in one place with free food, a Ping-Pong table, a kegerator, or laundry services—benefits that you champion instead of monetary compensation. When you are a full-time employee, you might believe that you are owned by a company and should be grateful to its leaders for generously making you show up in their office every day.

Which brings us back to Hollywood.

Forty-six summers ago, it wasn’t enough to see Spielberg’s first masterpiece, Jaws, and be scared; the whole point was to experience it with a bunch of other people in a shared space and feel something intangible. But our world has changed. Two years after trying to keep streaming movies out of the Oscars, Spielberg’s company, Amblin Partners—the studio behind such made-for-the-big-screen blockbusters as Saving Private Ryan, Jurassic Park, and Back to the Futuresigned a deal with Netflix that, if nothing else, will mean more people will soon watch more movies at home.

Across multiple genres and decades, Spielberg has known his audience. The 74-year-old cinematic guru had to understand that whatever reservations he’d had about how and where people watched movies didn’t matter as much as making movies that people would see. Perhaps he realized that the world was evolving faster than he was, or that his judgments of streaming were antiquated and, on some level, anti-creative.

And perhaps we’ll see the business world follow suit.

By:  Ed Zitron

Ed Zitron is the writer of the tech and culture newsletter Where’s Your Ed At and the CEO of the technology public relations firm EZPR.

Source: Why People Like Working From Home – The Atlantic

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The mRNA Vaccines Are Extraordinary, but Novavax Is Even Better

Masks Are Back, Maybe for the Long Term

The Best Way to Keep Your Kids Safe From Delta

Staying Visible When Your Team Is in the Office…But You’re WFH

This Scheduling Strategy Can Save You Hours Per Week

Hiring Experts Say These Are The Most Revealing Interview Questions They Ask

Remove these 7 things from your resume ‘ASAP,’ says CEO who has read more than 1,000 resumes this year

13 tech job sites make it easy to find a new job whether you want to work from home or not

How to branch out into a new industry without quitting your job

How to Make Better Decisions About Your Career

Avoid these 5 phrases that make you sound passive aggressive—here’s how successful people communicate

34 brilliant questions to ask at the end of every job interview

The unspoken reasons employees don’t want remote work to end

How Can I Get a Management Job Without Management Experience?’

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I’m a 26-year-old who quit my 6-figure job at Deloitte to be a TikToker and coach. People thought I was crazy, but I’m on track to

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Execs who’ve worked at Google, Starbucks, and other top employers share their best advice for acing a job interview and landing

Trillions of Negative-Yielding Debt Redeem Europe’s Bond Bulls

A deep pool of debt with below-zero returns is increasingly betting on European bonds. In a matter of weeks, German 10-year bond yields fell to the most in July from flirting with zero for the first time in two years, going back to minus 0.46% since the start of 2020. That fall – which has propelled bond prices – has helped push negative-yield debt volumes in Europe to a near six-month high of 7.5 trillion euros ($8.9 trillion).

Traders were alerted by the inflation bet, which initially raised borrowing costs, but lost heights after major central banks insisted on continued support. At the same time, the spread of Covid-19 variants stoked demand for the safest government loans, reviving a business that dominated global markets last year amid the pandemic.

Strategists at HSBC Holdings plc and ABN AMRO Bank NV never shied away from their call for benchmark bond yields at minus 0.50% by the end of 2021, which has been in effect since the first half of last year. That will erase a large portion of this year’s 54-basis point trough-to-peak advance.

The European Central Bank said last month that current inflation is driven by temporary factors, and any change in stance would depend on hitting the new 2% inflation target.

HSBC’s forecast was “based on the assumption that there will be no rate hikes before the end of 2023,” said strategist Chris Atfield. “It is mostly market priced now, helped by the new ECB forward guidance.”

Money markets have quickly cut back on policy tightening after the ECB revised guidance on interest rates, saying it would not react immediately if price hikes exceed that target for a “transient” period.

According to swap contracts, in July, traders wiped out 20 basis points more from rate-increasing bets. This is the biggest decrease in nearly two years, and they suggest they expect the ECB deposit rate to be below zero in five years.

HSBC’s Attfield said that “the new forward guidance criteria for rate hikes since 2008 will not have been met at any point,” highlighting the challenging task facing the ECB as it seeks to open up record monetary stimulus.

The euro area pulled out of recession in the second quarter, and headline inflation climbed to 2.2% last month. According to Mayva Cousin of Businesshala Economics, while rising pressures could push the annual CPI rate to more than 3% in the coming months, the increase will prove to be temporary and inflation is expected to decline sharply in early 2022.

According to a Businesshala survey, strategists see the German 10-year yield as low as minus 0.14% by the end of the year, down from minus 0.035% nearly a month ago. ABN AMRO strategist Flortje Merten sees a drop to minus 0.5%, given the balance between rate expectations and the state of the euro-regional economy.

“Further rate hikes and more optimistic sentiment would be two opposing factors and could keep Bund yields around these low levels,” Merton said.

This week

  • The Bank of England will meet with investors on Thursday to discuss the possibility of a split vote on bond purchases, given recent sharp remarks by some members of the Monetary Policy Committee.
  • European sovereign supplies should remain moderate at around 17.5 billion euros, according to Commerzbank, with auctions in Germany, Austria, France and Spain.

Source: Trillions of Negative-Yielding Debt Redeem Europe’s Bond Bulls

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Critics:

Historically, people give the government their money, instead of spending it, with the promise of being paid back, with interest. Now, governments are essentially getting paid to borrow money, as people become increasingly desperate for a safe haven for their wealth. The cycle becomes self fulfilling as negative rates raise further concerns about the economy.

“Bonds are supposed to pay the owner of capital something to pry the money out of their hands. But no … ” said co-founder of DataTrek, Nicholas Colas. Central banks often lower interest rates to grow the money supply in the economy, fuel demand and provide growth momentum. Other key drivers for monetary policy easing are weakening domestic outlooks, falling annual growth rates, low inflation and weakening business and consumer confidence. And in Europe’s case, make up for the lack of a coordinated fiscal response.

Another reason for negative yielding debt worldwide could be that institutional investors, like pension funds, are forced to keep buying bonds because of liquidity requirements. PIMCO’s global economic advisor Joachin Fels said there are also secular factors like demographics and technology that drive rates lower.

“Rising life expectancy increases desired saving while new technologies are capital-saving and are becoming cheaper – and thus reduce ex ante demand for investment. The resulting savings glut tends to push the “natural” rate of interest lower and lower,” said Fels.

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How the New Child Tax Credit Is Helping Parent Entrepreneurs

Eligible parents are slated to receive their monthly child tax credit payments starting Thursday. How you use the money could affect your business or help you start one.

The American Rescue Plan Act of 2021 expanded the tax credit score to $3,600 per baby underneath the age of six and to $3,000 for these aged six to 17. It is in impact only for 2021, although Biden has advocated making it making it everlasting.

Half of the funds might be despatched to folks in installments via December. For instance, a mum or dad with one baby underneath six would obtain $300 per 30 days. Dad and mom can declare the remainder upon submitting taxes for 2021–unless they choose out to allow them to obtain all the cash once they file.

Madilynn A. Beck, founder and CEO of Palm Springs, California-based Fountful–an app that gives “life-style providers” like manicures or DJ appearances on demand–is contemplating that strategy. Beck says that if she meets her enterprise targets this 12 months, Fountful might generate sufficient income to considerably enhance her tax burden come subsequent April. “I am protecting my head above water now,” she says. “What occurs if I’m absolutely underwater then and do not have a life vest?”

The kid tax credit score will have an effect on individuals at a “wide selection” of earnings ranges, says Daniel Milan, managing accomplice at Cornerstone Monetary Providers primarily based in Southfield, Michigan. For aspiring entrepreneurs, it’d offset childcare prices for just a few months whereas they work on getting a enterprise off the bottom. For others, the cash might simply assist alleviate day by day monetary stress.

That is the case for Ruby Taylor, CEO and founding father of Baltimore-based Monetary Pleasure Faculty, which supplies monetary literacy training and produces a card sport that teaches the topic to younger individuals. In April 2021, she and her spouse’s monetary scenario modified consequently of the pandemic however they nonetheless needed to cowl issues like a brand new roof and fence for his or her home.

Their financial savings account dwindled, and Taylor’s nervousness spiked, leading to her occurring blood stress and nervousness treatment. The additional $500 the mom of two expects to obtain means the couple can construct up their security web once more, taking the stress off each of them. “When she’s not pressured, I am not pressured,” Taylor says. It “will assist the enterprise not directly, as a result of I may be extra productive.”

Guardian entrepreneurs face the extra problem of staying current with spouses and kids, says James Oliver Jr., founder and CEO of ParentPreneur Basis, an Atlanta-based nonprofit that helps Black mum or dad founders financially and with an internet neighborhood (of which Beck and Taylor are each members).

 Month-to-month funds “may very well be the distinction of sending the youngsters to summer season camp, shopping for further groceries, taking a bit trip, or taking the youngsters to the amusement park as soon as a month to assist the household bond,” he says.

Source: How the New Child Tax Credit Is Helping Parent Entrepreneurs | Inc.com

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Critics:

The Internal Revenue Service today launched two new online tools designed to help families manage and monitor the advance monthly payments of Child Tax Credits under the American Rescue Plan. These two new tools are in addition to the Non-filer Sign-up Tool, announced last week, which helps families not normally required to file an income tax return to quickly register for the Child Tax Credit. The new Child Tax Credit Eligibility Assistant allows families to answer a series of questions to quickly determine whether they qualify for the advance credit.

The Child Tax Credit Update Portal allows families to verify their eligibility for the payments and if they choose to, unenroll, or opt out from receiving the monthly payments so they can receive a lump sum when they file their tax return next year. This secure, password-protected tool is available to any eligible family with internet access and a smart phone or computer. Future versions of the tool planned in the summer and fall will allow people to view their payment history, adjust bank account information or mailing addresses and other features. A Spanish version is also planned.

China’s Economy Continues Rebound With 4.9% Growth In Third Quarter

China’s GDP grew 4.9% in the third quarter compared to the same time last year, the country’s National Bureau of Statistics said Monday, as the economic superpower continues to rebound after the coronavirus pandemic.  

Key Facts

That growth was fueled by strong retail sales and industrial production, the government said. 

China’s exports rose 9.9% last month while imports soared 13.2%—two more strong signs of recovery. 

China’s is the only major economy that is expected to grow in 2020, according to the International Monetary Fund, which is forecasting 1.9% growth for the year. 

Crucial Quote 

Despite robust growth at home, the Chinese government also noted Monday that the global environment remains “complicated and severe” and that the country is under “great pressure” to prevent any further outbreaks of the virus. 

Key Background

China’s economy shrank 6.8% in the first quarter—its worst contraction in 40 years—as the government shut down nearly all activity in parts of the country to prevent the spread of the coronavirus. In the second quarter, growth bounced back to 3.2% after factories reopened and the government poured billions of dollars in stimulus measures back into the economy. 

Tangent

Economists expect the United States to see growth in the third quarter, too, but that growth is likely to be limited in the fourth quarter if further stimulus measures from the federal government are delayed until 2021. 

Further Reading

Economy Shrank At Historic 33% Annual Rate In Second Quarter—But That’s Not The Whole Story (Forbes)

China’s Exports Surged 9.5% In August Despite Escalating Tensions With The United States (Forbes)

Europe Breaks Record For Weekly Coronavirus Cases As Countries Enforce New Lockdowns (Forbes) Follow me on Twitter. Send me a secure tip

Sarah Hansen

Sarah Hansen

I’m a breaking news reporter for Forbes focusing on economic policy and capital markets. I completed my master’s degree in business and economic reporting at New York University. Before becoming a journalist, I worked as a paralegal specializing in corporate compliance

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