What's going on?

Data out on Monday showed that the Chinese economy staged a mixed recovery last quarter.

What does this mean?

China�s probably not sure whether it should be celebrating or grieving right now. See, the country�s quarterly report partly pleased optimists: the economy grew 3.9% last quarter versus the same time the year before � higher than economists were expecting and a rebound from near-stagnant growth just one quarter earlier. After all, supply chains were freed up as lockdowns in ports became less frequent, which helped industrial production grow 6.3% in September � and greater investment in things like machinery and infrastructure didn�t hurt either. But there was plenty for pessimists too: Covid restrictions hit retail sales, while the teetering global economy dented export growth last month. That�s not to mention the worrying facts that the real estate sector kept shrinking last quarter, and unemployment unexpectedly rose. Despite the positive headline number, then, China�s economy still has issues in spades.

Why should I care?

For markets: Covid�s the captain now.
Covid�s still calling the shots in China, with the country�s response to the pandemic dictating many elements of the Chinese economy. And given that President Xi has secured a third term as head of the ruling Communist Party � while filling key posts with loyal allies � the country�s zero-Covid approach seems unlikely to change anytime soon. No surprise, then, that the CSI 300, a key stock market index, fell 3% on Monday.

The bigger picture: No oil on troubled waters.
China�s the world�s biggest importer of crude oil, so the prospect of ongoing economy-bashing government policies doesn�t bode well for the price of the slippery elixir. Even a surge in oil imports into the country, to the highest level since May, wasn�t enough to balance out the pessimism: Brent crude � a key international oil benchmark � fell 2% on Monday morning when the data hit the press.