- After a historic drop of -6.8% in the first quarter, its economy escaped recession and has been accelerating with 3.2 in the second and 4.9 in the third.
- Ning Jizhe, the head of the NBS, added that quarterly GDP growth “have returned to the normal level.”
- Today's positive data is based on higher industrial production, boosted by state support, which rose 7.1% between October and December compared to 5.8 in the previous period.
China’s GDP increased by 6.5% in the last quarter of 2020, completing the year with an annual mark of 2.3%. The figures are courtesy of the official data published on Monday by the National Bureau of Statistics. By recording a positive outturn, China succeeded in turning around a year that began with the coronavirus threatening to become a thorn in its flesh.
China’s economy experienced a historic drop of -6.8% in the first quarter, but it’s economy managed to escape recession. Then, it had been accelerating with 3.2% growth in the second and 4.9 in the third quarter.
It was a faster pace than even before the health crisis. In the fourth quarter of 2019, China reported 6% growth, an improvement in comparison to the current 6.5%.
“China is expected to become the only one major economy in the world to achieve positive economic growth throughout the year,” said Ning Jizhe, the head of the NBS. Ning adding that quarterly GDP growth “have returned to the normal level.”
Bloomberg survey experts had earlier predicted 2.1% growth, but the result announced today is far higher than that. Recent estimates from the International Monetary Fund (IMF) showed that China will continue to grow economically raising its rate to 7.9% in 2021.
Today’s positive data is based on higher industrial production, boosted by state support, which rose 7.1% between October and December compared to 5.8 in the previous period. This metric closes 2020 with a growth of 2.8%, a marked decline compared to 5.7% in 2019.
The key to the good performance of the Chinese economy is its effective management of the virus, which has allowed the continuation of normality with minimal interruptions.
One of the factors that have aided the recovery has been the excellent performance of the foreign sector, which performed well, owing to the inability of many countries to deal with the virus within their borders.
According to official data published last week, Chinese exports grew by 18.1% in December, representing a trade surplus of $535 billion (€443 billion), the highest in five years.
The financial sector has also contributed. The yuan has broken the 6.5 barriers against the dollar for the first time since 2018, and the stock markets have reached their highest capitalization shares since the 2008 crisis. Unemployment has also fallen to 4.7% in 2020, compared to 5.5% a year ago.
During its annual meeting in June, the Chinese legislature decided not to set a GDP target, as is customary, in order to make this area a top priority for government action instead. The purpose was to create nine million new jobs this year. The data published today reflects that 11.8 million were reached.
As per statistics from the World Bank, today, China is an upper-middle-income country, and the world’s second largest economy.
However, its per capita income is still only about a quarter of that of high-income countries, and about 373 million Chinese are living below the upper-middle-income poverty line of $5.50 a day.