The Chinese economy grew at a faster rate than before the coronavirus pandemic in the fourth quarter of 2020, official data showed, as industrial production continued to drive the country’s recovery.
Gross domestic product growth exceeded expectations of hitting 6.5 percent in the last quarter of last year, according to figures released on Monday, with the economy expanding 2.3 percent over the year, a stark contrast with the expected performance of other large economies.
The new data underlines a rapid recovery in the world’s second largest economy, which fell in early 2020 for the first time in more than four decades after the country was hit by the pandemic and authorities have imposed a severe blockade. In the fourth quarter of 2019, China grew 6%.
The subsequent recovery was driven by higher industrial production, which benefited from state support and added 7.1 percent in the fourth quarter, compared to 5.8 percent in the previous quarter. Retail sales, a measure of consumer appetite, lagged behind the industrial sector and increased 4.6 percent in the fourth quarter.
Ning Jizhe, head of the National Bureau of Statistics, said the economy “rebounded steadily” last year, but added that “the change in the dynamics of the epidemic and the external environment is fraught with uncertainty”.
The GDP figures, which exceeded expectations, came days after China recorded the largest monthly trade surplus in its history in December, fueled by three consecutive months of double-digit export growth. Exports increased 18 percent last month compared to the same period last year.
The data adds up to a series of other measures that reflect the expansion of the Chinese economy. This month, the renminbi surpassed 6.5 against the US dollar for the first time since 2018, while China’s stock market has reached its highest level since the global financial crisis.
The country’s return to growth last year attracted a strong appetite from foreign investors, who channeled some Rmb1 trillion ($ 154 billion) into Chinese stocks and bonds through Hong Kong’s investment programs in 2020.
In China, new cases of Covid-19 declined to a trickle in mid-2020, but a recent outbreak in northern Hebei province has spawned a new wave of social restrictions and blockades. Last week, the country reported its first coronavirus death since April.
Unemployment was 5.2 percent in December, unchanged from the previous month. Investments in fixed assets increased 2.9% in the whole year, while real estate investments increased 7%.
Additional reporting by Xinning Liu in Beijing
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