China’s economy grows 4% in the last quarter of 2021

The economy of China grew by just 4% in the last quarter of 2021, its slowest pace in a year and a half, at which time as the country grappled with a deepening housing crisis, new outbreaks of Covid-19 and Beijing’s strict no-tolerance approach to controlling the virus.

Still, that number was higher than economists expected.

For the whole of 2021, GDP grew by 8.1%, practically in line with analysts’ expectations. The Chinese government set a target last spring for its economy to expand by at least 6% for the year.

Growth in the final quarter of the year was driven by industrial production, which grew 4.3% year-on-year – accelerating from November’s 3.8% growth.

But consumption has weakened dramatically. Retail sales rose just 1.7% in December from a year earlier, well below the 3.9% increase in November.

China has been facing a number of problems recently, including turmoil in its real estate sector and a series of Covid-19 outbreaks.

The problematic Chinese real estate developer Evergrande – which has about $300 billion in total liabilities – has been struggling to pay off its debts and was recently ordered to demolish a few dozen buildings across the country.

Analysts have long feared that an Evergrande meltdown could trigger broader risks for China’s property market, hurting homeowners and the broader financial system.

Meanwhile, Beijing’s unwavering insistence on eliminating any trace of the coronavirus is facing a huge test as authorities deal with the accelerating spread of the virus. Omicron. And an outbreak of the Delta variant recently forced Xi’an’s industrial hub into lockdown, affecting production lines at global chipmakers like Samsung and Micron.

Economists have warned that China’s zero Covid approach to containing the virus could spell serious trouble for the economy in 2022. Goldman Sachs, for example, lowered its 2022 Chinese economic growth forecast to 4.3% from 4.8%. , just over half of the year.

*In update.