In 2020 marked by the global recession caused by COVID-19, L.He Chinese economy was one of the few who opposed, and grew by 2.3% thanks to the control of infections, International demand for products related to the epidemic or the stimulus policy promoted by the authorities.
Despite the assumption that the development of gross domestic product is the lowest since 1976, the figure published today by the National Statistical Office (ONE) is “better than expected”, as is the case with analysts and international institutions. Which predict a progress of about 2%.
If global forecasts come true, the data will confirm China as one of the few economies to record economic expansion in 2020, and most importantly, as a unit of powers to do so.
In nominal terms, China’s total wealth last year totaled 101.6 trillion yuan ($ 15.68 trillion, 12.98 trillion euros), a figure widely celebrated in the official press because it is the first event in which the index exceeds one hundred trillion.
“In the last 20 years, our GDP has increased tenfold, and we expect (Chinese GDP) to make up 17% of the world by 2020 for the second year in a row,” explained ONE Director Ning Jiza at a press conference in Beijing.
Authorities are talking about a “sustained recovery” throughout the year that began with an economic collapse of 6.8% year-on-year between January and March, the most difficult months of the epidemic in China, accompanied by weeks of economic paralysis. After the lunar Rosh Hashanah.
However, the restart of operations from April means increases of 3.2% in the second quarter, 4.9% in the third quarter and finally 6.5% compared to the same quarter last year, a figure that not only represents a return to pre-epidemic growth rates, but the biggest quarterly progress in two years.
Keep in mind that for the first time since 2002 China has not set a specific growth target for 2020 because of the epidemic.
In 2020, disposable income per capita rose 2.1% adjusted last year to over 32,000 yuan ($ 4,960, € 4,110), well below an increase of 5.8% in 2019.
“Income growth has not yet reached pre-epidemic levels. (…) Because the private sector accounts for more than 85% of urban employment, continuous recovery is needed to increase rents for full economic recovery.” Says Jingyang Chen, an economist at HSBC.
With the completion of these milestones, it seems that the discussion in Beijing is now focusing on how and when to repeal the stimulus policy introduced during 2020 to reduce financial risks and leverage.
Other data were also released today, such as retail sales, which fell 3.9% last year, and industrial production, which rose 2.8% year-on-year.
Some analysts note that the recovery in China was driven by the supply side rather than the demand side, citing the fact that in December retail sales grew less than expected (+ 4.6%) while industrial production exceeded forecasts (+ 7.3%).
“There is a huge margin of growth in domestic consumption (…), we must improve the purchasing power of the residents and improve our consumption policy,” Ning admitted today, preferring to focus on a variety of industries and “liquidity.” From Chinese logistics, which has met international demand for medical products Or electronic, highly sought after in the plague.
Consumption will increase in the short term as households spend the additional savings accumulated during 2020 in which citizens chose cautiously in the face of economic evolution uncertainty, predicts Julian Evans-Pritchard, an analyst at Capital Economics.
On the other hand, investment in fixed assets grew by 2.9%, and the official unemployment rate in the municipality remained at the same level as in 2019 and stands at 5.2%.
Unnecessary to less in 2021
Looking ahead to 2021, authorities know the plague continues to pose a danger, especially when China has outbreaks that have not been seen for months, jeopardizing the usual route of New Year celebrations to the moon, a traditional time of consumption. Because it is the most important holiday of the year in the Asian country.
“The foundations of China’s economic recovery are still unstable,” said Ning, who acknowledged the “uncertainty” that these recent outbreaks were economically plausible but ensured the risks were “controllable” thanks to “accumulated experience” in the fight against the epidemic and immune systems.
For Tommy Wu, an Oxford economics analyst, fears of outbreaks and declines in New Year’s travel relative to forecasts may affect the development of the first quarter, though he rules out a “major economic impact” due to management. That China has done from previous eruptions.
For Global this year, the expert believes that growth will continue to areas like consumption and corporate investment, thus moving away from infrastructure and real estate investment.
Evans-Pritchard expects the power of the last quarter of 2020 to shift to the first half of 2021 thanks to the impact that stimuli still have on industry or construction, as well as the impact of reduced benchmarks in the first two quarters of last year.
However, the analyst believes that as vaccines spread around the world, demand for Chinese products will decline, and that Beijing will partially remove its aid policy throughout the year, thus expecting less spectacular growth rates. In the second half of 2021.