China's GDP growth in 2020 signals robust momentum

By Zhou Fujing

China's GDP (gross domestic product) grew by 2.3 percent in 2020 and exceeded  100 trillion yuan, China's National Bureau of Statistics (NBS) announced on January 18. China, the world's second-largest economy, is expected to be the only major economy to post growth in the pandemic-ravaged year.

On January 5, 2021, a worker is assembling a truck at the China FAW Group Corporation's China First Automobile Works, located at Changchun, north China's Jilin Province.

China's annual GDP growth target is a most closely-watched number. It is usually clearly stated in the Report on the Work of the Government delivered by Premier of the State Council, China's cabinet, at the annual session of the National People's Congress (NPC) in early March. However, the GDP growth rate was absent from the 2020 report because of the uncertainties caused by the COVID-19 outbreak.

The absence was temporary. China's economic performance took on a smiling curve and V-shaped recovery in 2020: 6.8 percent drop year-on-year in the novel coronavirus-ravaged quarter 1; 3.2 percent up in Q2 when resumption of work and production were undergoing; 4.9 percent up in Q3; 6.5 percent roaring in Q4.

The V-shaped recovery from the biggest slump on record was engineered by getting Covid-19 under control and implementing fiscal and monetary stimulus to boost investment and consumption. David Chao, global market strategist for Asia Pacific (ex-Japan) at Invesco Ltd, commented, "China is the only major economy to squeak out growth last year, a testament to their successful pandemic containment efforts."

China's GDP growth in 2020 signals high-quality growth momentum in 2021; but curbing the resurgence of novel coronavirus infections remains a tough, challenging task facing the country this year. Currently, local infections have been detected in Hebei and Heilongjiang provinces, although China gained valuable experience from last year and they are controllable.

Stimulating residents' consumption ability is important as well.

More residents have reduced budget on clothing, travelling and entertainment and tightened their belts. They become more rational in consumption.

The tense US-China relations also weigh on the outlook. Sound relations between the U.S. and China, the world's first two economies, are helpful for global economic recovery. In his final weeks in office, President Donald Trump has tightened restrictions on Chinese businesses. It's unclear if the incoming administration under Joe Biden will change those measures.

(The views don't necessarily represent those of the CCTV.com.)