/ world today news/ In 2020, China became the only major economy in the world that avoided recession due to the coronavirus pandemic. The country’s GDP grew by 2.3%, which turned out to be better than the forecasts of the World Bank and the International Monetary Fund. Experts explain this with the introduction of strict quarantine restrictions at the beginning of 2020 and large-scale state support measures for the economy. Experts do not rule out that in 2021 the country’s GDP will increase by more than 8%. At the same time, the rapid growth of the Chinese economy can accelerate the recovery of the economies of the entire Asian region and benefit Russia, experts say.
In 2020, China’s GDP grew by 2.3%. Such data on Monday, January 18, was published by the National Bureau of Statistics of the People’s Republic of China.
As follows from the materials of the World Bank, the achieved figure is the lowest since 1976, but it turns out to be higher than predicted. Thus, earlier the experts of the organization estimated the growth of the Chinese GDP at the end of 2020 at 2%, and the experts of the International Monetary Fund (IMF) – at 1.9%.
At the same time, the Asian republic has become the only major economy in the world to avoid collapse amid the COVID-19 pandemic. For example, according to a preliminary assessment by the IMF, as a result of the consequences of the coronavirus, the global GDP has decreased by 4.4%, the American economy – by 4.3%, India – by 10.3%, Japan – by 5.3% , Germany – by 6%, and Russia – by 4%.
The first cases of coronavirus infection were registered as early as December 2019 in the Chinese city of Wuhan. In February 2020, the number of cases in China reached 80 thousand and the country’s authorities were forced to impose strict quarantine measures.
As a result of the restrictions and mass shutdown of businesses, China is facing a record decline in business activity. According to the “Tsaisin” analytical agency, at the end of February, the corresponding Index of orders of supply managers (PMI) in industry and services fell to 40.3 and 26.5 points. The values became the lowest ever observed.
IPMD reflects the real state of an industry. A reading above 50 points indicates a positive economic situation, below 50 points indicates stagnation in the sector.
In addition, according to the results of the first quarter of 2020, China’s GDP entered negative territory for the first time in 28 years and fell by almost 7%. Already in the second quarter, however, the economy grew by 3.2%, in the third quarter by 4.9%, and in the fourth quarter the growth rate accelerated to 6.5%.
In turn, the PMIs for industry and services returned to pre-crisis levels by the end of 2020, reaching 53 and 56.3 points, respectively. The actions of the PRC authorities played a key role in the rapid recovery of the Chinese economy. This point of view was expressed by the acting director of the Institute for the Far East of the Russian Academy of Sciences Alexei Maslov.
According to the expert, the state has significantly reduced taxes, provided private enterprises with long-term low-interest loans, and also provided free access to many electronic platforms. At the same time, import and export duties were reduced to revive trade in the country.
„The country produced a large number of goods in a short time, which helped to avoid inflation. In addition, China began to invest in large infrastructure projects – in the construction of railways, electricity grids and many others. The state invests just as actively in start-upsmany of which ended up making money during this period rather than going bankrupt Maslov added.
As follows from official statistics, in 2020 the total volume of investment in China increased by 2.9% compared to 2019. At the same time, investment in high-tech services and manufacturing increased by 9.1% and 11, respectively. .5%.
In the last months of 2020, additional support for the PRC economy has been provided by increased demand for Chinese products from a number of countries that have just begun to recover from the effects of the pandemic, commented Alexander Rozman, senior analyst at Forex Optimum.
“The supply of all kinds of consumer goods has greatly increased, from furniture, toys, household appliances and ending with electronics. In addition, there was a high demand for medical devices and pharmaceuticals. Exports of these particular groups of goods from China increased the most in 2020 – by 22% and 31%, respectively,” Rozman explained.
According to the World Bank, China’s GDP could grow by 7.9% in 2021. At the same time, IMF experts forecast growth of 8.2%. The country’s economy last showed similar rates in 2011-2012.
According to Alexey Maslov, China will be able to provide economic growth of nearly 8% due to the dual circulation strategy announced by the authorities. As part of the initiative, Beijing intends to focus specifically on developing its domestic market. At the same time, the level of openness of the PRC economy to external partners should become higher.
“By design, banks give a lot of loans and don’t demand quick repayment. As a result, money enters circulation and production. At the same time, China is noticeably opening its market for imports not only of goods, but also of services,” the expert explained.
According to Alexander Rozman, the growth of business activity in China will accelerate the recovery of other countries in East Asia. Thus, by increasing imports, the PRC will stimulate production in neighboring countries.
“China is not only a huge export factory, but also a huge sales market. This means that the growth of the PRC economy provides demand in a large number of other countries. In the Asian region, these are Japan, South Korea, Malaysia, Vietnam, Thailand, Singapore. From these countries alone, China imports goods worth almost 560 billion dollars a year, “explains the expert.
The growth of the Chinese economy plays a positive role for Russia as well, Alexey Maslov is convinced. As the expert recalled, even during a pandemic, countries remain their main trading partners.
„The expansion of the PRC economy will allow the country to buy more of our products. With the right strategy, Russia has every chance to significantly increase its presence in the Chinese markets “, concludes the expert.
Translation: V. Sergeev
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