Chinas economy grows 2.3% in 2020 as rebound from coronavirus gains pace

Monday, 18 Jan, 2021

Imports climbed 6.5% last month, better than November's 4.5% increase and the economists' expectations of a 5.1% rise.

Fixed asset investment increased 2.9% in 2020 on year, compared with a forecast 3.2% increase and a 2.5% growth in the first 11 months of the year.

In Q4, the industrial output grew 7.1 per cent year on year, 1.3 percentage points higher than that recorded in Q3.

December imports jumped 24% from the 775,000 tonnes brought in the prior month to 964,000 tonnes, close to the monthly record hit in July 2020, as buyers stocked up for the peak consumption season during the upcoming Lunar New Year.

Ning Jizhe, head of China's statistics bureau, said in a briefing that there will be many favorable conditions to support China's economic recovery in 2021. His predecessor, Donald Trump, hurt exporters by hiking tariffs on Chinese goods and manufacturers including telecom equipment giant Huawei and imposing curbs on access to US components and technology.

Backed by the strict virus containment measures and policy stimulus, the economy has recovered steadily from a steep 6.8% 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.

Retail sales, whose recovery has lagged behind that of industrial activity, shrank 3.9% for the full year with consumers wary of spending as the pandemic lingered.

Increasingly, China is working to make its economy more independent from the West, they said.

Once China had virus cases under control and factories were able to resume production, growth was spurred by strong overseas consumer demand for Chinese exports, especially medical equipment and work-from-home devices. At a December meeting to lay out economic goals for 2021, the ruling Communist Party signaled that stimulus would be gradually withdrawn, although it would avoid any "sharp turns" in policy.

"This momentum will continue, although the current COVID-19 outbreak in a couple of provinces in northern China might temporarily cause fluctuation", Yue Su, the Principal Economist for the Economist Intelligence Unit (EIU) said.

Exporters and high-tech manufacturers face uncertainty about how President-elect Joseph Biden will handle conflicts with Beijing over trade, technology, and security.

Global exports surged 18.1 per cent in December over a year earlier to US$281.9 billion.

Imports of American goods were US$1.6 billion, giving China a US$3-billion surplus.

In 2019, China's economy grew at its worst pace in 29 years, expanding 6.0 percent, against a backdrop of a prolonged tit-for-tat tariff trade dispute with the United States.