Chinese economy achieves V-shaped recovery
The recovery was driven by massive government stimulus programs and increased exports of pandemic-related products such as face masks and laptops
By ATB Economics 19 January 2021 1 min read
Keeping in mind the need for a degree of skepticism when it comes to official economic data coming out of China, preliminary estimates of real GDP growth in the Middle Kingdom last year show an increase of 2.3 per cent over 2019.
By Chinese standards, this is a slow pace with annual growth averaging 7.7 per cent between 2010 and 2019.
Measures to contain COVID-19 led to a sharp contraction of -6.8 per cent in the first quarter of 2020 compared to the same quarter a year earlier. GDP was growing again by the second quarter and was back up to 6.5 per cent by the fourth.
The recovery was driven by massive government stimulus programs and increased exports of pandemic-related products such as face masks and laptops.
According to a Bloomberg News report, “while the revival makes China the only major global economy to have expanded last year, it didn’t come without cost as long-term imbalances worsened. Consumption lagged industry as workers tightened their belts and income inequalities widened.”
China’s economic recovery is good news for the Alberta economy as it will help lift commodity prices and soften the overall blow to global trade from the pandemic.
Answer to the previous trivia question: About 80 per cent of the new vehicles purchased in Alberta in November 2020 were manufactured* in North America.
Today’s trivia question: In what year did the economic opening of China (a.k.a. socialism with Chinese characteristics) begin?
*New motor vehicles fall into two categories: those manufactured in North America and those manufactured overseas. The latter are imported in a fully assembled state from countries other than the United States or Mexico.