Recent figures revealed that the Chinese economy expanded by 2.3% in 2020, an indication that the economy is getting back some of its strength after being hit by the pandemic. The growth recorded by the company makes it an outlier among large economies, even as the World Bank predicts that the U.S. economy will contract by 3.6% in 2021.
The world’s second-largest economy, China, finished 2020 on a high, with its GDP rising above 6.5% in Q4 from a year earlier, according to data from the National Bureau of Statistics. This makes it China’s best quarter of year-over-year growth in two years.
“In an extraordinary year, China’s economy was able to record an extraordinary achievement, handing over a result that satisfied the Chinese people, attracted the attention of the world and which can be written in the annals of history,” Ning Jizhe, head of the statistics bureau said. Mr. Ning had earlier stated in 2020 that the size of the Chinese economy surpassed 100 trillion yuan, equivalent to $15.4 trillion, with the GDP per capita topping $10,000 for the first time.
China’s full-year growth rate of 2.3% is the country’s weakest annual economic expansion since the demise of Mao Zedong in 1976. Before the tumultuous 2020, the worst economic year of the country’s “reform and opening” era that began in the late 1970s came in 1990, following the Tiananmen Square crackdown, when the economy grew by 3.9%.
The 6.5% growth recorded in the final quarter means that the country’s economy has reclaimed the growth trajectory it had before the emergence of the coronavirus crisis around a year ago.
China, unlike governments in Western countries, focused on restarting factories while keeping interest rates relatively higher. Consequently, factories began reopening in April, just as most of the rest of the world’s manufacturing capacity was taken out by the ravaging pandemic. China was able to profit by producing and exporting mass quantities of medical equipment and work-from-home equipment.
China is yet to fully recover from the impact of the pandemic, especially with the second wave of the virus rearing its ugly head. According to data from China’s statistics bureau, retail sales rose by just 4.6% in December from a year earlier, lower than November’s 5% increase and a 5.5% expansion expected by economists.
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