China's stronger-than-expected economic rebound and continuous structural improvements last year have signalled that the country’s pursuit of high-quality growth is set to gain more momentum this year, officials and experts said on January 18.
The world’s second-largest economy grew by 2.3 per cent in 2020, and it should be the only major economy to have achieved annual growth, the National Bureau of Statistics (NBS) said on January 18.
The country’s annual gross domestic product (GDP) came in at 101.6 trillion yuan ($15.7 trillion) last year, surpassing 100 trillion yuan for the first time and indicating that its overall national strength has reached a new level, the bureau said.
NBS head Ning Jizhe said: “Main targets and tasks for economic and social development have been accomplished with better-than-expected results.”
Economic growth normalised to pre-Covid-19 levels in the fourth quarter last year and hit 6.5 per cent year-on-year, up from 4.9 per cent in the third quarter, Ning said, adding that the achievements were hard-earned amid the pandemic and global economic recession.
Multiple factors will help sustain steady economic recovery into 2021, he said, pointing to the country’s vast domestic market as having provided a strong buffer against external uncertainties while accelerating digitalisation spurs high-quality development.
The government will further reform efforts to narrow income gaps and boost new consumption growth points, while expanding investment to address weak links in the economy, Ning said.
Experts said they expect reviving consumption to replace investment and exports as the main driver of economic growth this year, underpinning strong annual growth forecasts between seven and nine per cent.
A low comparison base in 2020, ramped-up investment in manufacturing sectors and new types of infrastructure as well as exports buoyed by the global economic recovery will also help sustain China’s economic rebound, they said.
The country’s consumer market has gradually recovered from the effects of Covid-19, with the growth in retail sales recovering to 4.6 per cent year-on-year in the fourth quarter, versus 0.9 per cent in the third quarter, even as local Covid-19 cases constrained consumption in December, according to NBS.
Recovering incomes and stabilising employment have boosted experts’ confidence in the anticipated recovery in consumption. The surveyed urban jobless rate nationwide was 5.2 per cent last month and 5.6 per cent on average for the whole year, below the government’s annual control target of six per cent, NBS said.
Per-capita disposable income grew by 2.1 per cent in real terms to 32,189 yuan last year, with income growth for rural residents coming in at 3.8 per cent and outpacing their urban counterparts, the bureau said.
ICBC International chief economist Cheng Shi said: “The narrowing income gap between urban and rural residents, in tandem with the quicker sales of goods related to consumption upgrades in the fourth quarter, signalled that consumption upgrading will percolate to lower-tier cities and rural areas, creating new growth points of consumption.”
Accelerating digitalisation should be another key structural improvement in 2020 that will help bolster high-quality development this year, experts said, with the use of 5G, intelligent technologies and the internet of things to further inject economic momentum.
The value-added output of high-tech manufacturing sectors rose by 7.1 per cent last year, outpacing the 2.8 per cent growth for the whole industrial sector, according to NBS. Investment in high-tech industries grew by 10.6 per cent in 2020, versus 2.9 per cent of total fixed-asset investment.
As the economy embarks on the 14th Five-Year Plan (2021-2025), which turns self-reliance in science and technology into a strategic pillar for national development, investment in innovation and new types of infrastructure will be stepped up this year, experts said.
Dutch bank ING chief China economist Iris Pang she expects active fiscal stimulus in 2021 to support technology research and development, companies in difficulties and the development of green energy, while monetary policy is expected to remain unchanged given an upbeat growth picture.
China’s GDP is expected to grow by 12 per cent year-on-year in the first quarter of this year and seven per cent for the whole year, Pang said.
Despite promising growth prospects, officials and experts highlighted the need to be wary of mounting uncertainties, especially the pandemic situation and geopolitical tensions.
NBS’ Ning said the recent local resurgence of Covid-19 cases in some areas has brought uncertainties to future economic recovery, but the impact should be limited as the country has established plans to rapidly contain the spread and minimise related economic losses.
Catherine Yeung, investment director at global asset manager Fidelity International, said: “For this year, should global growth not recover, policymakers in China still have the tools to implement stimulus support, especially given that relative to other central bankers last year, they were very conservative with easing measures.”
CHINA DAILY/ASIA NEWS NETWORK