China economy grows in 2020 as rebound from virus gains

china-economy-grows-in-2020-as-rebound-from-virus-gains

BEIJING: China eked out 2.3% economic growth in 2020, likely becoming the only major economy to expand as shops and factories reopened relatively early from a shutdown to fight the coronavirus while the United States, Japan and Europe struggled with flare-ups.

Growth in the three months ending in December rose to 6.5% over a year earlier, up from the previous quarter’s 4.9% and stronger than many forecasters expected, official data showed Monday.

In early 2020, activity contracted by 6.8% in the first quarter as the ruling Communist Party took the then-unprecedented step of shutting down most of its economy to fight the virus. The following quarter, China became the first major country to grow again with a 3.2% expansion after the party declared victory over the virus in March and allowed factories, shops and offices to reopen.

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Exports were boosted by demand for Chinese-made masks and other medical goods.

The growing momentum “reflected improving private consumption expenditure as well as buoyant net exports,” said Rajiv Biswas of IHS Markit in a report. He said China is likely to be the only major economy to grow in 2020 while developed countries and most major emerging markets were in .

The economy “recovered steadily” and “living standards were ensured forcefully,” the National Bureau of Statistics said in a statement. It said the ruling party’s were “accomplished better than expectation” but gave no details.

2020 was China’s weakest growth in decades and below 1990’s 3.9% following the crackdown on the Tiananmen Square pro-democracy movement, which led to China’s international isolation.

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Despite growth for the year, “it is too early to conclude that this is a full recovery,” Iris Pang of ING said in a report. “External demand has not yet fully recovered. This is a big hurdle.”

Exporters and high-tech manufacturers face uncertainty about how President-elect Joseph Biden will handle conflicts with Beijing over trade, and . His predecessor, Donald Trump, hurt exporters by hiking tariffs on Chinese goods and manufacturers including telec


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