TAIPEI, Taiwan — A year ago, the coronavirus began spreading rapidly in China. Today, China's economy is bouncing back hard, and expanding even faster than it did before the pandemic.
In a sign of how quickly China has managed a turnaround, the National Statistics Bureau said that its gross domestic product rose 6.5 percent during the fourth quarter of 2020, exceeding the 6 percent pace at the end of 2019, before the coronavirus took hold. China’s GDP surpassed a milestone in 2020, topping 100 trillion yuan, or about $15 trillion.
“In an extraordinary year, China’s economy was able to record an extraordinary accomplishment,” Ning Jizhe, head of the statistics bureau, told reporters. “It’s a performance that is satisfactory to the people, watched by the world, and can be recorded in the annals of history.”
China’s new GDP milestone, Ning added, reflected how “our country’s economic strength, science and technology strength, and overall national strength have jumped to a new level.”
As President-elect Joe Biden enters office this week, he’ll be confronted with a China that does not seem diminished, at least superficially, in economic health or international stature. Chinese President Xi Jinping recently struck a bullish tone during his New Year’s Eve address, when he declared he was “proud of his great motherland” and the sacrifice and unity his countrymen displayed to quickly beat back the coronavirus through strict lockdown measures and an all-hands mobilization of medical and manufacturing workers.
With the virus essentially contained by late spring 2020 — and only re-emerging on a small scale in recent weeks — Chinese sectors such as construction, heavy industry and export manufacturing were jump-starting last year just as other countries plunged into crisis. China’s economy only dipped into negative territory once, during the first quarter of 2020, when authorities locked down Hubei Province and its capital, Wuhan, and enforced softer lockdown measures around the country.
In recent weeks, Chinese state media and its globe-trotting foreign minister, Wang Yi, have told world leaders from Myanmar to the European Union, as well as global investors, that China’s fast recovery could lift the rest of the world. Thanks to Xi’s leadership and diplomatic outreach, Wang claimed earlier this month, China “has brought hope for the world economy to step out of the doldrums.”
“China’s economy continues to power ahead with remarkable momentum, leaving other major economies, most of which are still struggling to register some semblance of growth, in the dust,” said Eswar Prasad, a professor at Cornell University and former China director for the International Monetary Fund. “China has cemented its position as the primary driver of what has so far been a dismal global economic recovery.”
Last week, Chinese officials said exports hit an all-time high of $2.6 trillion in 2020. Despite a bitter trade war with President Trump, China’s trade surplus with the United States reached a record $316.9 billion for the year.
Employment was also picking up as the economy created 11.86 million jobs during the year, the statistics bureau said.
But some economists point out that China’s recovery, while impressive at first glance, belied a return to old tactics that China has hoped to shift away from: debt-fueled spending on infrastructure and a reliance on dirty heavy industries, including state-owned coal and steel production. Domestic consumption and retail that could help the middle class, for instance, appeared fragile, according to the data. Real wages have stagnated compared to GDP.
“Growth last year came from real estate and infrastructure investment, which is a kind of bad growth that China for years had tried to constrain — it’s not healthy growth,” said Michael Pettis, a professor of finance at Peking University in Beijing. “Yes, some things did turn out well, economic activity grew, and the unemployment was brought down, but many other indexes performed very badly.”
The government sought to rally the domestic audience with the ruddy data. Weibo, the People’s Daily newspaper, Communist Party branches at institutions and influential commentary accounts all posted the news Monday with the hashtag “Remember this beautiful V-shaped recovery!” to drive social media chatter. But not all Chinese were impressed.
Under celebratory government posts, many Chinese left a torrent of complaints about the uneven recovery, echoing complaints heard elsewhere in the world. Many complained about inflation; others, soaring rent. Often, people said they didn’t feel richer.
“Classic case of rich country, poor citizens,” a user who went by “TyrionLanniste” told the People’s Daily newspaper, which disabled comments for the statistics bureau news conference after several hours as it grew clogged with grousing.
The Chinese Academy of Social Sciences predicted this month that China could grow 7.8 percent in 2021 as it fully bounced back, a pace that would be reminiscent of prior decades. But that’s not guaranteed.
In northern Hebei Province, which surrounds Beijing, authorities have reported almost 700 covid-19 cases since the beginning of January, in the worst flare-up since last spring. Authorities have reinforced a lockdown over about 20 million residents in northern China, including several large cities near Beijing, after several small outbreaks.
Chinese officials have canceled public events, large gatherings such as weddings and unfurled street signs and publicity campaigns urging workers not to travel home during the Lunar New Year period, when hundreds of millions of citizens usually crisscross the country to visit family.
Those tough measures may crimp economic activity in industries such as travel in the short term, economists warn. But they could help China quickly contain new cases and bounce back, which it has already proved capable of.
“Reduced confidence and travel during the Chinese New Year holidays in February could hamper” first-quarter growth, said Louis Kuijs, an economist at Oxford Economics, in a research note. “But, at least for now, we think the risk of major economic impact is low, given China’s track record of containing outbreaks.”
Lyric Li contributed to this report.