China was the world’s only major economy to have grown in 2020 with all others suffering Covid-related recessions
China looks set to be the only major economy in the world to have grown last year as other countries suffered devastating Covid-related recessions.
The Communist state – the birth-place of the global coronavirus pandemic – said output rose by 2.3 per cent in 2020 as it bounced back quickly from a slump early in the year.
That was still the weakest rate of growth for more than 40 years after Beijing imposed an extensive lockdown following the initial outbreak.
Workers move computers on a street in the Chinese City of Wuhan last week. The communist state looks set to be the only major economy in the world to have grown last year
But other economies – including the UK, US, Europe, Japan, Brazil and South Africa – have fared far worse since the virus spread from China to the rest of the world.
National output is expected to have dropped by around 10 per cent in the UK, France and Italy last year while the German economy shrank by 5 per cent.
China is forecast to continue to power ahead of its peers this year, with GDP set to expand at the fastest pace in a decade at 8.4 per cent, according to a Reuters poll.
The world’s second-largest economy has surprised many with the speed of its recovery from the coronavirus jolt, especially as policy-makers have also had to navigate tense US-China relations on trade and other fronts.
Beijing’s strict virus curbs enabled it to largely contain the Covid-19 outbreak much quicker than most countries, while government-led policy stimulus and local manufacturers stepping up production to supply goods to many countries crippled by the pandemic have also helped fire up momentum.
In early 2020, activity contracted by 6.8 per cent in the first quarter as the ruling Communist Party took the then unprecedented step of shutting down its economy to fight the virus.
The following quarter, China became the first major country to grow again with a 3.2 per cent expansion after the party declared victory over the virus in March and allowed factories, shops and offices to reopen.
Output then rose by 4.9 per cent in the third quarter and 6.5 per cent in the final three months of 2020.
‘The higher-than-expected GDP number indicates that growth has stepped into the expansionary zone, although some sectors remain in recovery,’ said Xing Zhaopeng, economist at ANZ in Shanghai.
But 2020 was China’s weakest growth in decades and below the previous recent low of 3.9 per cent in 1990 following the crackdown on a pro-democracy movement, though it was well ahead of the United States and other major economies.
The International Monetary Fund and private sector forecasters expect economic growth to rise further this year to above 8 per cent.