China's economy grows 2.3% in 2020 as rebound from coronavirus gains pace

China's economy, which was the first to be hit by the coronavirus pandemic and early to recover from its impact, grew 2.3 per cent in 2020, registering the lowest annual growth rate in 45 years, but bucking the trend of slowdowns being experienced by major world economies.

The Gross Domestic Product (GDP) of the world's second-largest economy grew by 2.3 per cent, expanding to $15.42 trillion in dollar terms in 2020, according to the data released by China's National Bureau of Statistics (NBS) on Monday.

In the local currency, the GDP exceeded 100-trillion-yuan ($15.42 trillion) threshold to 101.5986 trillion yuan, it said.

 

The Chinese economy which suffered a 6.8 per cent slump in the first quarter in 2020 after it went into lockdown following the emergence of the deadly coronavirus in Wuhan staged a steady recovery after quickly containing the Covid-19, while the virus turned into a global pandemic, hitting all major economies around the world, including India.

Aided by strict virus containment measures and emergency relief for businesses, the Chinese economy staged a steady recovery.

In the fourth quarter of 2020, China's GDP expanded 6.5 per cent year on year, faster than the 4.9-per cent growth in the third quarter, the NBS said.

The country's economic operation has recovered steadily with employment and people's well-being effectively guaranteed, the NBS said, adding that the major tasks of economic and social development have been completed better than expected.

Partly, China's global exports of medical supplies, specially relating to coronavirus, has also contributed to growth in manufacturing and exports.

China's job market grew at 5.6 per cent but below the government's annual target of around six per cent.

According to the data, a total of 11.86 million new urban jobs were created in 2020, completing 131.8 percent of the target set for the whole year, the NBS said.

In December, the surveyed urban unemployment rate was 5.2 per cent, flat with the same period of the previous year.

But the emerging new clusters of coronavirus in the country prompted China to strengthen controls, casting a shadow over higher growth projections for this year.

Ning Jizhe, the head of the NBS, said that the main targets of economic and social development (in 2020) have been completed better than expected.

China is expected to become the only major economy in the world to achieve positive economic growth throughout the year, he said, adding that quarterly GDP growth have returned to the normal level.

Analysts say with global bodies like the International Monetary Fund projecting growth rate above 8 per cent this year, China's economy could be picking up pace.

"The GDP data shows the economy has almost normalised. 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.

"The government's strong anti-coronavirus measures that help effectively contained the spread of the virus, the flexible countercyclical macroeconomic policies, as well as the efforts taken to deepen reform and opening up to the outside world, have all contributed to the better-than-expected economic results in 2020," Cao Heping, a professor at the School of Economics of Peking University, told the state-run Global Times.

As per the NBS data, China's value-added industrial output, an important economic indicator, went up 2.8 per cent year on year in 2020.

The growth accelerated from a rise of 2.3 per cent registered in the first 11 months of last 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 alone saw the output growth rise to 7.3 per cent, up by 0.3 percentage points from November, the NBS data showed.

The output of the manufacturing sector went up 3.4 per cent year on year last year, the fastest among the three major sectors, which also include mining and the production and supply of electricity, thermal power, gas and water, the NBS data said.

The mining output edged up 0.5 per cent year on year, while the production and supply of electricity, thermal power, gas and water reported a year-on-year growth of 2 per cent.

Industrial structure continued to improve last year, with the output in high-tech manufacturing and equipment manufacturing industries expanding by 7.1 per cent and 6.6 per cent, respectively.