China reported that its gross domestic product (GDP) grew 2.3% last year, ending a turbulent coronavirus-stricken 2020 in good shape and remains steadfast to expand further this year, as the world struggled to contain the pandemic.
It marked the weakest growth pace in more than four decades.
Meanwhile, for the world’s second -largest economy, consumption has lagged expectations as figures from National Bureau Statistics (NBS) showed the retail sales contracted 3.9 % for the year as Chinese consumers remain cautious on their spending. Retail sales for the fourth quarter rose 4.6% from a year ago.
In late 2019, when the first Covid-19 cases emerged in the central city of Wuhan, authorities lockdown more than half the country in order to prevent the spread of the coronavirus. The economy contracted by 6.8% in the first three months of 2020, but however, the country’s economy returned to growth in the second quarter of the year.
Analysts expect economic growth to rebound to 8.4% in 2021, before slowing to 5.5% in 2022.
Although this year’s predicted growth rate would be the strongest in a decade, led by a big increase in the first quarter, it is rendered less impressive coming off the low base set in pandemic-stricken 2020.
NBS lowered the national growth rate to 6.0% compared to the previous reported figure of 6.1% in late December. The cut primarily occurred in manufacturing, as factories dealt with new US tariffs on billions of dollars’ worth of Chinese goods.
A recent rebound in Covid-19 cases in China could impact activity and consumption in the run-up to next month’s long Lunar New Year holidays, according to some analysts.