China’s economy grew faster than expected in 2020 despite pandemic
China’s economy grew at a faster-than-expected pace in the fourth quarter of last year, ending a rough coronavirus-stricken 2020 in remarkably good shape and remained solidly poised to expand further this year, new data has shown.
The Gross Domestic Product (GDP) expanded 6.5 percent, data from the National Bureau of Statistics showed on Monday, faster than the 6.1 percent forecast by economists in a Reuters news agency poll, and followed by 4.9 percent growth in the third quarter.
GDP grew 2.3 percent in 2020, the data showed, making China the only major economy in the world to avoid a contraction last year as many nations struggled to contain the Covid-19 pandemic.
Aided by strict virus containment measures and policy stimulus, the economy has recovered steadily from a steep 6.8 percent slump in the first three months of 2020 when an outbreak of Covid-19 in the central city of Wuhan turned into a full-blown epidemic.
The world’s second-largest economy has been fuelled by a surprisingly resilient export sector, but consumption – a key driver of growth – has lagged expectations amid fears of a resurgence of Covid-19 cases.
Data showed 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.
Weakest GDP in four decades
Despite the steady recovery in quarterly growth, 2020 GDP growth was at the weakest pace in more than four decades.
The slew of bright economic data has reduced the need for more monetary easing this year, leading the central bank to scale back some policy support, sources told Reuters, but there would be no abrupt shift in policy direction, according to top policymakers.
On a quarter-on-quarter basis, GDP rose 2.6 percent in October-December, the bureau said, compared with expectations for a 3.2 percent rise and a revised 3.0 gain in the previous quarter.
Analysts expect economic growth to rebound to 8.4 percent in 2021, before slowing to 5.5 percent in 2022.
Growth in 2021
While this year’s predicted growth rate would be the strongest in a decade, led by a big jump in the first quarter, it is rendered less impressive coming off the low base set in pandemic-stricken 2020.
Some analysts also cautioned that a recent rebound in Covid-19 cases in China could impact activity and consumption in the run-up to next month’s long Lunar New Year holidays.
China reported more than 100 new Covid-19 cases for the sixth consecutive day, with rising infections in the northeast fuelling concerns of another national wave ahead of a major holiday season.