China's Economy Grows 2.3% Last Year, "Solo Plus" (Update)

4th Quarter Growth of 6.5% Only... Recovery from C Shock

[Asia Economy Beijing=Special Correspondent Jo Young-shin] Despite the COVID-19 pandemic, China was the only major country to achieve positive growth. On the 18th, the National Bureau of Statistics of China announced that last year's gross domestic product (GDP) growth rate was preliminarily estimated at 2.3%. Although this is the lowest level in 30 years since 3.9% in 1990, the prevailing assessment is that China managed to recover despite the adverse impact of the pandemic.

China, which experienced the COVID-19 pandemic earlier than any other country, saw its economic growth rate plunge to -6.8% in the first quarter of last year. However, it recorded growth rates of 3.2% in the second quarter and 4.9% in the third quarter, successfully achieving a 'V'-shaped rebound and regaining stability. In the fourth quarter, it posted a growth rate of 6.5%, exceeding expectations.

With China's economy achieving positive growth, the gap in economic scale with the United States is likely to narrow rapidly. Professor Wei Miaojie of Peking University said in an interview with the state-run Global Times, "If China's economy grows by 2% while the U.S. economy contracts by -3.6%, China's economic scale will reach 70-71% of the U.S.," adding, "If the current trend continues, China's economy could surpass the U.S. by 2028."

China's positive growth was driven by exports (manufacturing). Last year, China's exports amounted to $2,590.65 billion (approximately 2,861.37 trillion KRW), an increase of 3.6% compared to the previous year. Imports were $2,055.61 billion, down 1.1% from the previous year. The trade surplus was $535.03 billion, the largest since 2015.

Since Chinese exports are typically concentrated in November and December, China's positive economic growth was anticipated. In fact, the trade surplus during these two months accounted for 30% of the total, reaching $153.63 billion.

The Producer Price Index (PPI), a fundamental indicator of the Chinese economy, also signaled positive growth. The PPI, which reflects prices of raw materials, intermediate goods, and product shipment prices, fell to -3.7% in May last year but showed a recovery trend every month, reaching -0.4% in December.