“The performance was better than we expected,” said Ning Jize, a spokesman for the Chinese 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 by about 7% in the first quarter as large swaths of the country were put on lockdown to contain the spread of the virus.
Since then, the government has tried to stimulate growth through major infrastructure projects and by providing cash grants to stimulate spending among citizens.
Industrial production was a particularly large engine of growth, jumping 7.3% in December compared to the previous year.
“In and out of lockdown before anyone else, the Chinese economy has moved forward while much of the world has struggled to maintain equilibrium,” Frederick Newman, co-chair of Asia Economy Research at HSBC, wrote in a research report released Monday.
This has led to “setting a bottom line” in other areas Added to the regional markets. Increased Chinese investment in infrastructure and real estate, for example, has been a boon to countries such as Australia, South Korea and Japan that have exported supplies to China.
Trade was also strong. China’s total surplus for this year reached a record high of $ 535 billion, up 27% from 2019, according to statistics released last Friday. Analysts pointed out that the country They have taken advantage of the huge demand for protective equipment and electronics as people all over the world work from home.
However, some weaknesses remain. Retail sales lost ground slightly in December, rising 4.6% compared to 5% in November. For the full year, retail sales were down 3.9%. Ning, a spokesperson for the National Bureau of Statistics, blamed the drop in sales on the resurgence of the coronavirus in some places.
“Sporadic” issues in China will bring uncertainty to [our] Economic recovery, “ he added.
However, Ning said the country believes the epidemic is under control, and he said the authorities expect people to spend more money this year.
Analysts from Capital Economics Meanwhile, we believe that the outlook is “bright” for the near term.
“Despite the recent decline in retail sales, we are seeing many positive aspects of consumption as households cut back on the excess savings they had accumulated last year,” Julian Evans-Pritchard, chief Chinese economist at Capital Economics, wrote in a note Monday. “Meanwhile, the tailwind from last year’s stimulus should keep the industry and construction strong for a longer period.”