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China, the only major economy with positive growth in 2020

2021-01-18T07:01:56.541Z


Despite the Covid-19 pandemic, the Asian giant has achieved annual growth of 2.3%. From our correspondent in Asia One year after the start of the pandemic, China is accelerating its recovery, asserting itself as the locomotive of a global economy still mired in the health crisis. The Asian giant has achieved annual growth of 2.3% in 2020, according to official statistics unveiled Monday morning in Beijing, becoming the only major economy on the planet to escape the recession in


From our correspondent in Asia

One year after the start of the pandemic, China is accelerating its recovery, asserting itself as the locomotive of a global economy still mired in the health crisis.

The Asian giant has achieved annual growth of 2.3% in 2020, according to official statistics unveiled Monday morning in Beijing, becoming the only major economy on the planet to escape the recession in this year of Covid.

Read also: Caught up by the Covid-19, China responds quickly and strongly

This increase in GDP remains the lowest under the communist regime since 1976, at the end of the Maoist era, and represents only a third of that of the previous year.

But it allows the country to increase its weight in the global economy, draining investors from around the world.

"

The Chinese economy has not fully recovered from the Covid, but it has recovered very well compared to other countries,

" said Zhang Lin, an independent economist based in Beijing.

Industrial production grew 7.3% year on year

China ended 2020 with a bang, recording 6.5% growth in Q4, amplifying its 4.9% rebound in the previous quarter, and more than offsetting the slump in activity in the first months of the year. year due to containment measures.

In December, industrial production reached its highest growth rate of 2020, growing 7.3% year on year, confirming the recovery in activity, despite sluggish global demand.

China is driven by the rebound in its exports, which grew by 18% in December, particularly in the medical field, and is taking advantage of the logistical difficulties encountered by its competitors.

The IMF welcomes this "

rapid recovery

", the result of the regime's proactive support policies which have cushioned the shock and fueled the rebound.

This recovery allows China to approach 2021 in a favorable position, to amplify its performance according to Natixis, while this year will mark the centenary of the Chinese Communist Party, under the aegis of President Xi Jinping.

A strong political symbolism.

Continuing to catch up, "

growth could reach 8% in 2021

" wants to believe Mei Xinyu, researcher at the China Academy of International Trade and Economic Cooperation, government think tank, while the IMF forecasts 7.9%.

Read also: Coronavirus: Chinese power hinders a WHO mission

Dependence on public credits, fragile domestic consumption

Nevertheless, this economic recovery hides persistent weak points, further reinforcing dependence on public credits and debt, against a backdrop of shyness in domestic consumption, in a volatile geopolitical context.

Growth is still unbalanced, as the recovery has relied heavily on public support, while private consumption slows.

Increased financial vulnerabilities, and a difficult external environment pose risks for the future

”according to the IMF, which was speaking on the eve of the inauguration of US President Joe Biden.

Private sector debt rose by 10% in 2020, to weigh 127% of GDP, reversing the trend seen in recent years, while productivity remains well below that of developed countries, further points out the international organization .

The Sino-American strategic rivalry, assumed by Donald Trump, should continue under the aegis of the new Democratic administration, raising fears of new tensions in Hong Kong, or in the South China Sea.

To read also: Renaud Girard: "What is China trying to hide?"

Above all, consumption is still fragile, struggling to become the growth engine desired by the authorities, who want to reduce their international dependence, and confirming the concern of the middle classes for the future.

Retail sales, the main indicator of consumption, slowed, growing only 4.6% year-on-year in December, compared to 5% the previous month.

Domestic consumption is insufficient.

The trend has not been very good for five years.

The incomes of the inhabitants are continuously declining, compared to the incomes of governments and companies

”according to Zhang Lin.

In the background, there is uncertainty over the real situation of unemployment, whose official figure of 5.2% concerns only urban areas, and masks the difficulties of tens of millions of migrant workers, whose incomes have been hit. the brunt of the crisis, and have no social protection.

International investors flocking

These Chinese shadows do not scare international investors, looking for prospects in a world still largely paralyzed by the pandemic, causing an inflow of 152 billion dollars in capital between January and November, up more than 6% on the year. previous years.

Western brands are seeking outlets in one of the only markets where life without a mask has resumed, despite an upsurge in Covid cases in Hebei province.

"

Investors are flocking because there is a lack of growth elsewhere,

" said Duncan Clark, founder of the consulting firm BDA, in Beijing. This attraction pulls the Chinese currency upwards, leading to an appreciation of nearly 7% against the dollar over the past year, symbolizing the insolent resilience of China to the Covid, and an America on the ground. To the point of worrying the authorities, who are trying to prevent a strong yuan, so as not to halt the recovery in 2021, which should crown the "

patriotic

"

victory

of the Party against the "

demon of the virus

", as President Xi put it. And mark a new threshold towards the fulfillment of his “

Chinese dream

” of rebirth.

Source: lefigaro

All business articles on 2021-01-18

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