China's economy grows 2.3% in 2020 as recovery quickens

 

 

Hong Kong (CNN Business)China's economy grew more than expected last year, even as the rest of the world was upended by the coronavirus pandemic.

The world's second largest economy expanded 2.3% in 2020 compared to a year earlier, according to government statistics released Monday. 

 

It's China's slowest annual growth rate in decades — not since 1976 has the country had a worse year, when GDP shrunk 1.6% during a time of social and economic tumult. 

 

But during a year when a crippling pandemic plunged major world economies into recession, China has clearly come out on top. The expansion also beat expectations: The International Monetary Fund, for example, predicted that China's economy would grow 1.9% in 2020. It's the only major world economy the IMF expected to grow at all. 

 

"The performance was better than we had expected," said Ning Jizhe, a spokesman for China's National Bureau of Statistics, at a press conference in Beijing.

 

The country scrapped its growth target last year for the first time in decades as the pandemic dealt a historic blow to the economy. GDP shrank nearly 7% in the first quarter as large swaths of the country were placed on lockdown to contain the spread of the virus.

 

Since then, though, the government has attempted to spur growth through major infrastructure projects and by offering cash handouts to stimulate spending among citizens.

 

Those measures appear to be working: The pace of the recovery accelerated in the final quarter of the year, growing 6.5% in the October-to-December period compared to a year earlier, according to the government. That's faster than the 4.9% growth recorded in the third quarter. 

 

Industrial production was a particularly big driver of growth, jumping 7.3% in December from a year earlier.

 

"In and out of lockdown ahead of everybody else, the Chinese economy powered ahead while much of the world was struggling to maintain balance," wrote Frederic Neumann, co-head of Asian economics research at HSBC, in a Monday research report.