China’s economy grows in fourth quarter, bucking global trend

Employees work on the assembly line of printed circuit board for smartphone in Jiangsu Province of China.

China’s latest official figures have confirmed it was the only major economy to see growth in 2020. The world’s second largest economy says it grew 2.3% last year, with the final quarter seeing growth of 6.5% – up from 4.9% in the third quarter.

Shutdowns from Covid-19 had caused the economy to slump by 6.8% in the first three months of 2020, strict virus containment measures and emergency relief for businesses helped the economy recover. However, Covid-19 still had a major impact, with nationwide shutdowns of factories and manufacturing plants forcing economic growth to its slowest rate for four decades. Monday’s data also showed a 7.3% increase in industrial output and a 4.6% increase in retail sales for the fourth quarter of 2020.

Many analysts are tipping growth to accelerate in 2021, but the China Bureau of Statistics has warned of a “grave and complex environment both at home and abroad”, with the pandemic having a “huge impact”. Data on Thursday showed Chinese exports grew by more than expected in December, as coronavirus disruptions around the world fuelled demand for Chinese goods. That’s despite a stronger yuan, which makes Chinese exports more expensive for overseas buyers.

China also bought record volumes of crude oil, copper, iron ore and coal in 2020. Chinese leaders pledged at a key agenda-setting meeting last month to maintain “necessary” policy support for the economy this year, while avoiding a sudden policy shift.

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