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China says its financial system grew 2.three% in 2020, however client spending fell

Employees working on a dry-type transformer production line at a power generation factory in Haian, east China's Jiangsu Province, Jan. 4, 2021.

Stringer | AFP | Getty Images

BEIJING – China reported that GDP rose 2.3% last year as the world battled to contain the coronavirus pandemic.

Gross domestic product grew 6.5% year over year in the fourth quarter, official data from the National Bureau of Statistics showed.

However, Chinese consumers continued to be reluctant to spend as retail sales fell 3.9% over the year. Retail sales increased 4.6% year over year in the fourth quarter.

The online sales of consumer goods rose relatively quickly by 14.8% in the past year, the statistics office announced, but the share of total retail sales remained relatively constant at around a quarter.

Economists expected China to be the only major economy to grow over the past year, and predicted GDP growth of just over 2%.

Covid-19 first appeared in the Chinese city of Wuhan at the end of 2019. To control the virus, Chinese authorities closed more than half the country and the economy contracted 6.8% in the first three months of 2020.

However, China returned to growth in the second quarter. Economists polled by Reuters predicted that GDP would grow 6.1% in the fourth quarter, faster than the 4.9% pace in the previous quarter.

China's GDP growth this year will assume a lower base.

In late December, the National Bureau of Statistics cut China's official growth rate for 2019 to 6.0% from the 6.1% previously reported. The cut came mostly in manufacturing as factories dealt with new US tariffs on Chinese goods valued at billions of dollars.

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