China is projected to report a 2.1% increase in its gross domestic product in 2020 on Monday, the only major economy to have avoided a contraction, according to Yahoo!finance. Analysts expect China’s GDP to expand further 8.2% this year, setting it on course to pass the U.S. as the biggest economy in 2028.
- China’s economic ascent is accelerating just a year after its first coronavirus lockdowns, with its success in controlling the pandemic boosting its share of global trade and investment.
- The projected growth of China in 2020 contrasts global output which fell 4.2% last year, pushing the Asian nation’s share of it to 14.5% at 2010 dollar prices.
- The economy converged with the U.S at the fastest pace on record, with China’s GDP being 71.4% of American levels in 2020, up 4.2% from the previous year.
- Foreign investment into China reached more than $129.5 billion through November 2020, slightly above the previous year despite FDI flows falling 30-40% globally in 2020.
- China is already deepening ties with Asia and Europe and is looking for domestic consumption to power its next phase of growth amidst trade wars with the U.S.
- Analysts believe if China’s virus control success continues, it could solidify its position in the global economy even as it seeks to double its GDP from 2020 levels by 2035.
- China’s enhanced role in the post-pandemic world raises the urgency of debate about the rest of the world on how to engage with Beijing, with some countries seeking closer ties.
- China, nonetheless, faces challenges of worsening relations with the U.S which could limit access to technology, a rapidly aging population, and over-reliance on debt-funded investment.
Chinese stocks and the Yuan are currently declining. CSI 300 is down 0.23%, USDCNY is up 0.04%