China's Accelerated Recovery Key To Global Growth

 

City, Shanghai, China, Night, Building

Unlike other major economies, China (GXC) has rebounded and its recovery is accelerating. It could fuel a third of global economic growth in 2021. 

With the Spring Festival holidays just weeks away, recent resurgences of COVID-19 infections in Jilin province and Shijiazhuang, Hebei province have renewed concerns about sporadic outbreaks.

China’s public-health authorities believe a major outbreak of the novel coronavirus in the Chinese mainland is unlikely. The authorities have taken strong containment measures to rapidly identify, isolate and control potential outbreaks.

Nonetheless, despite the holidays, Chinese people have been urged to avoid travels, to keep the infection rate under control. Downside risks permit no complacency in the foreseeable future. 

In the light of the lockdowns in major economies and the number of global cumulative cases at 100 million, current Chinese figures are marginal. International risks associated with the pandemic and external demand are a different story. 

Already variants of the virus, identified in the United Kingdom, Brazil, South Africa, and the United States have shown to be more transmissible. New adverse mutations loom in the horizon.

As the World Health Organization recently cautioned, the first half of 2021 may be tougher than 2020, at least in the United States, Western Europe and even Japan.  

The question is, will China’s recovery prevail amid the dire global landscape? 

Key indexes signal broad recovery

In 2020, China was the only major economy to avoid negative economic growth. Amid the pandemic and perhaps the severest contraction in modern history, China’s real GDP growth of 2.3 percent exceeded expectations. 

The performance relied on fiscal and monetary support, but as recovery is accelerating, monetary easing no longer seems warranted. In the mid-December Central Economic Work Conference, the top authorities took note of the economic success, while stressing the need to further foster the foundations of recovery. 

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