China economy grows 2.3% in 2020 as rebound from virus gains

The Chinese economy grew 2.3 per cent in 2020 as a recovery from the coronavirus pandemic accelerated while the United States, Europe and Japan struggled with disease flare-ups.

Growth in the three months ending in December rose to 6.5 per cent over a year earlier, up from the previous quarter’s 4.9 per cent, according to official data released Monday.

Activity contracted by 6.8 per cent in the first quarter in 2020 as factories and shops shut down to fight the virus. The following quarter, China became the first major country to grow again with a 3.2 per cent expansion after the Communist Party declared victory over the virus in March and reopened the economy.

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That was China’s weakest growth in decades but ahead of the United States and other major economies. They have yet to report 2020 growth but all are on track to show full-year activity contracting before vaccines are rolled out and commeriice returns to normal.

China has re-imposed controls on travel in some areas after a spate of cases this month but most of the country is unaffected.

Growth was aided by global demand for Chinese-made masks and other medical supplies.

Exports rose 3.6 per cent last year despite a tariff war with Washington. Exporters took market share from foreign competitors that still faced anti-virus restrictions.

The International Monetary Fund and other forecasters expect economic growth to rise further this year to above 8 per cent.

In December, it was reported that China would overtake the United States as the world’s largest economy in 2028, five years earlier than the previous estimation.

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In its annual report, the Centre for Economics and Business Research (CEBR) hailed China’s ‘skilful management of the pandemic’ and said that ‘the COVID-19 pandemic and corresponding economic fallout have certainly tipped this rivalry in China’s favour.’

The report said India, ‘which now appears to have been pushed back to being the sixth biggest economy in 2020,’ after having overtaken the UK in 2019 to bag the fifth spot, will again overtake the country to become the fifth-largest economy in 2025. By 2030, India will race to the third spot, the report said.

(With inputs from Agencies)