While other major economies are feeling slumps in economic performance due to the coronavirus pandemic, China was able to bounce back a year after Covid-19 started to spread in their country.
China’s National Bureau of Statistics on Monday reported a strong 6.5 percent growth in the last three months of 2020 which is an improvement from the 4.9 percent growth posted in the previous quarter.
The improved Chinese economy in the second half of 2020 helped China post an overall 2.3 percent GDP growth in 2020 as many businesses and consumers resumed work after closures were issued earlier in the year to stem out the early spread of the infection.
As many major economies in Europe, North America, and Asia continue to struggle in controlling the spread of Covid-19 in their countries, China’s economy expanded last year making them the only major economy reporting positive growth as many factories and businesses remained open.
The world’s second-largest economy has recovered quickly in the second-half of 2020 even with continuing economic tensions with the United States that has unleashed a barrage of trade blacklists among big businesses, particularly from the Tech sector.
The Associated Press reported that the Chinese economy “recovered steadily” and “living standards were ensured forcefully,” the National Bureau of Statistics said in a statement. It said the ruling party’s development goals were “accomplished better than expectation” but gave no details.
Quite pivotal to China’s recovery was its strict coronavirus measures at the onset of the pandemic which forced many major cities into lockdowns. State-led policy stimulus was also key to the quick economic recovery as many of the top manufacturing companies and exporters helped supply the need for medical goods and protective equipment needed to combat the pandemic.
China’s manufacturing sector also helped in its hastened recovery as industrial output was up at 7.3 percent in December 2020 as compared to a year ago.
In contrast, however, to the positive outlook in the manufacturing and export sector in China is the weakened consumer spending. This was evident as China’s NBS report indicated a 3.9 percent decline in retail sales in 2020.
Meanwhile, online sales of consumer goods increased to 14.8 percent last year as consumer spending shifted online due to lockdowns and store closures amid fears of the spread of the virus.
Despite the return of consumer spending in the second half of the year, retail sales in China were only at 4.6 percent as sales of fashion, cosmetics, and cars dropped in the last quarter of 2020. This is the first time that a contraction in retail sales has been noted since 1968.
China’s 2020 GDP growth was also it’s weakest since 1976 as travels and consumer spending expected in the first quarter of 2020 were badly hit by measures to curb the spread of the virus.
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