China’s Growth Beats Estimates as Economy Powers Out of Covid
GDP rose 6.5% in fourth quarter, faster than expected
China could surpass U.S. as largest economy by 2028: Nomura
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China’s economy roared back to pre-pandemic growth rates in the fourth quarter as its industrial engines fired up to meet surging demand for exports, pushing the full-year expansion beyond estimates and propelling its global advance.
Gross domestic product climbed 6.5% in the final quarter from a year earlier, pushing growth to 2.3% for the full year. That leaves the world’s second-largest economy driving global growth and potentially passing U.S. GDP sooner than previously expected.
The V-shaped recovery from the biggest slump on record was engineered by getting Covid-19 under control and deploying fiscal and monetary stimulus to boost investment. Growth accelerated as the nation’s factories revved up to meet demand for medical equipment and work-from-home devices in an export bonanza that saw it ship 224 billion masks from March through December -- almost 40 for Cened, as they have elsewhere around the world.
“There’s a huge discrepancy between production and consumption,” said Bo Zhuang, chief China economist at TS Lombard. “I am not very optimistic about domestic demand, as wage growth is not back to pre-pandemic levels.”
The stimulus to support the economy through the pandemic has been accompanied by a surge in debt which authorities are now seeking to curb as the recovery takes hold. At a December meeting to lay out economic goals for 2021, the ruling Communist Party signaled that stimulus would be gradually withdrawn, although it would avoid any “sharp turns” in policy.
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