Chinese growth remains positive in 2020 despite the Covid

The gradual improvement in sanitary conditions from the spring, however, allowed the gross domestic product (GDP) to rebound. It was up 6.5% over one year in the last quarter, its pre-pandemic level, said Monday the National Bureau of Statistics (BNS).

The Chinese economy has enjoyed an enviable trajectoryXiao, Chun Xu

For the whole of 2020, China recorded 2.3% growth. This is a figure higher than the predictions of analysts polled by Agence France-Presse (+ 2%). But this performance is much lower compared to that of 2019, when Chinese growth was 6.1%, already at its lowest level in nearly three decades.

Unlike most other countries that are expected to announce a recession, “the Chinese economy has enjoyed an enviable trajectory for most of 2020,” said analyst Xiao Chun Xu of the rating agency Moody’s. Although questionable, the official growth figure in China is still under scrutiny, given the country’s weight in the global economy.

Industrial production up 2.8%

The recovery in activity in China was particularly noticeable at the end of the year, due to “very strong demand” abroad for medical products and equipment for teleworking (especially computers), underlines for the Agence France-Presse analyst Rajiv Biswas, from IHS Markit. In December, the world’s workshop industrial production hit its highest growth rate of 2020, growing 7.3% year on year.

As a sign of the impact of the pandemic, industrial production only grew by 2.8% over the year as a whole, the lowest figure at least since the turn of the century. Retail sales, the main indicator of consumption, slowed down last month, growing only 4.6% year-on-year, compared to 5% in November.

+ 2.3%, a rate not reached since 1976

The Chinese economy “has faced a serious and complex situation both at home and abroad. […] due in particular to the enormous consequences of the epidemic “of Covid-19, recognized Ning Jizhe, an official of the National Bureau of Statistics (BNS). The score of 2.3%, which Western economies can envy, is its lowest rate for China since the end of the Maoist era in 1976.

On the employment front, the unemployment rate, measured in China only in urban areas, stood at 5.2% in December (unchanged from November). Particularly monitored by the government, this figure excludes from its calculation the millions of migrant workers, weakened by the pandemic. The unemployment rate reached an all-time high in February 2020 of 6.2% of the urban labor force.

Sales down 16.6% in catering

China has largely contained the coronavirus epidemic on its soil through tests, lockdowns, quarantines and movement tracking. Life has returned to near-normal, with the exception of new outbreaks in the region bordering Beijing and in the northeast of the country, where the authorities have reimposed strict quarantine measures. Certain sectors, in particular services, remain penalized by the fear of the virus. This is the case for catering: sales fell 16.6% over the whole of 2020.

And the trend could well continue this year in the event of deteriorating sanitary conditions in China, warns analyst Ting Lu, of the investment bank Nomura. The International Monetary Fund (IMF) warned that the consequences of the virus were still weighing down, especially on domestic demand. The institution lowered its growth forecast for China by 0.3 point this year, to 7.9%.