China’s economy picks up – bucking global trend
China’s economy grew at the slowest pace in more than four decades last year, official figures show, but remains on course to be the only major economy to have expanded in 2020. The economy grew 2.3% last year, despite Covid-19 shutdowns causing output to slump in early 2020.
Strict virus containment measures and emergency relief for businesses helped the economy recover. Growth in the final three months of the year picked up to 6.5%.
“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,” said Yue Su, principal economist for the Economist Intelligence Unit.
China’s mainland share markets as well as Hong Kong’s Hang Seng posted modest gains on the latest figures, which exceeded economists’ expectations, according to a Reuters poll.
However, Covid-19 was still a major drain on growth in 2020, with nationwide shutdowns of factories and manufacturing plants forcing economic growth down to its slowest rate for four decades.
China’s manufacturing sector appears to have recovered, with Monday’s data showing a 7.3% increase in industrial output. Exports have also led the way. Data last week showed Chinese exports grew by more than expected in December, as coronavirus disruptions around the world fuelled demand for Chinese goods.
That is despite a stronger yuan, which makes Chinese exports more expensive for overseas buyers.