The Chinese economy grew more than expected in 2020, even as the rest of the world was upended by the coronavirus pandemic.
The data presented by the National Bureau of Statistics on January 18, 2021 showed the Gross Domestic Product (GDP) expanded 6.5 % faster than the 6.1 % forecast by economists in a Reuters news agency poll and followed by 4.9 % growth in the third quarter.
A 2.3 % of GDP growth in 2020, show that China is the only major economy in the world to avoid a contraction in 2020 as many nations struggled to contain the Covid-19 pandemic.
The Chinese economy was fuelled by a resilient export sector, but consumption, a key driver of growth has lagged expectations amid fears of a resurgence of Covid-19 cases. China’s new “Dual Circulation” policy, introduced at the end of last year, is expected to encourage Chinese consumption and is a step towards moving the Chinese economy from an export manufacturing base to a consumer model.
Data showed that Chinese exports grew by more than expected in December, as coronavirus disruptions around the world fuelled demand for Chinese goods even as a stronger Yuan made exports more expensive for overseas buyers.
Rajiv BISWAS, a chief Asia-Pacific economist at IHS Markit told to Al Jazeera: “The strengthening momentum of China’s economic rebound during the fourth quarter of 2020 reflected improving private consumption expenditure, as well as buoyant net exports”.
“China’s exports of medical equipment and electronics have grown very strongly in recent months, boosted by ongoing pandemic-related demand for personal protective equipment and computers and mobile devices for working from home,” BISWAS added.
According to NBS figures, China’s exports grew by 4 % in 2020 despite a trade war with the US and broken supply chains due to coronavirus lockdowns.
The research firm Capital Economics said the latest growth figures appear to accurately reflect a sharp economic rebound in the fourth quarter of 2020.
Julian EVANS-PRITCHARD, a senior China economist at Capital Economics, said in a note sent to Al Jazeera: “Our in-house measure, the China Activity Proxy (CAP), also points to a marked pick-up in growth last quarter despite showing a deeper downturn earlier in the year”.
Some analysts are optimistic that vaccines being rolled out in developed countries will help to restore consumer demand there, potentially giving Chinese factories an export-driven boost.
Economists Kevin LAI and Eileen LIN at Daiwa Capital Markets in Hong Kong say they see China’s economy growing by 7.5 % in 2021, probably far outpacing its global peers. “We expect this growth to remain unbalanced, with gains coming from exports and industries, but not filtering down to jobs and household incomes,” Daiwa’s economists said.
China’s vast manufacturing sector continued to gain momentum, with industrial output rising at a faster-than-expected rate of 7.3% last month from a year ago, hitting the highest since March 2019.
Analysts expect economic growth to rebound to 8.4% in 2021, before slowing to 5.5% in 2022.
This article was edited using the data from the Aljazeera.com, Thestar.com.my, Trtworld.com, Cnn.com, and China-briefing.com.