China's economy shows 2.3 percent growth in 2020, lowest in 45 years

China's economy showed a growth of 2.3 percent in 2020 as a rebound from the coronavirus pandemic, as per the latest data provided by the National Bureau of Statistics on January 18, 2021.  This was the nation's lowest economic growth in four decades but it was still ahead of other major economies. 

The economy of the United States and other major economies including Europe and Japan continued to be affected by the COVID-19 pandemic due to continuous flare-ups in the number of infections. 

Key Highlights 

• The Chinese economy posted almost 6.5 percent growth in the three months ending in December, in comparison to the earlier year. This was up from the previous quarter's growth of 4.9 percent. 

• China's economic activity had contracted by 6.8 percent in the first quarter in 2020 with the shutting down of shops and factories to fight coronavirus. 

• In the following quarter, China had become the first major country to show economic rebound with a 3.2 percent growth after the government reopened the economy in March. 

• The country's growth rate last year was, however, the lowest since the nation's economy shrank by  1.6 per cent in 1976.

• Despite this, it was still ahead of the United States and other major economies, as they are yet to report growth in 2020.

Significance

While the discovery of the new mutated variant of COVID-19 in the United Kingdom resulted in travel restrictions and the re-imposition of national lockdowns in several places, China largely remains unaffected. The country just re-imposed controls on travel in some areas after a spike in cases. 

The growth in China's economy was aided by global demand for Chinese-made masks and other medical supplies. The nation's exports rose by 3.6 percent in 2020 despite a tariff conflict with the United States. 

As per forecasters and the International Monetary Fund (IMF), the economic growth is expected to rise further this year to above 8 percent.