China’s economy roars ahead as engine for global growth
China’s economic indicators for the first quarter of 2021 have been released. At an annualized rate, the economy grew 18.3% from January through to April, facilitating a complete economic recovery as the world deals with the disruption of COVID-19, and consumption reasserts itself, registering the highest tally since 1993.
In line with the GDP figures, industrial output increased 24.5% from last year, exports by 38.7%, imports 29.2%, retail sales of consumer goods 33.9%, and fixed-asset investment by 25.6%, all positive indicators showing a healthy and resilient economy, which is forecast to end the year up around 8.4% as a whole.
The impressive resurgence of China’s economy is the product of a stable internal environment facilitated by rapid and sustained containment of the COVID-19 pandemic, supply chain resilience and other matching rebound of other major economies.
Irrespective of geopolitical uncertainties, China continues to remain an engine of global growth and subsequently an integral part of the world recovery. This illustrates why it must continue to promote the country’s economic and development strategies, as well as setting a firm example in how to recuperate one’s economy in the midst of crisis.
First of all, China’s recovery must be premised on its absolutist and strident pandemic prevention and control strategy, one which has protected national stability and prevented a massive resurgence of the virus. This has certainly paid off.
A year ago, China suffered a temporary economic hit of 6.8% following the first national lockdown, but through wholesale population spanning testing, strict quarantining and uncompromising transport curbs, the outbreak was quashed and normal life was enabled to resume.
Since that time, there have been small new pockets of new virus cases in some provinces, but by aggressively enforcing this strategy on a localized scale, China has completely prevented a “second wave” altogether unlike other countries that have been beset again and again.
This has produced a climate of consistent stability, and given China a head start over the rest of the world on reopening its economy. This, in turn, has allowed China-based supply chains to remain resilient and stable, providing the rest of the world with medical supplies, equipment and now vaccines.
These circumstances allowed China to ride out a global recession in achieving 2.3% GDP growth in 2020, being the only major economy in the world to do so. Of course, the global economy is interdependent and, in line with this, the recovery in some other countries subsequently drags up China’s growth faster as demand for consumer goods pushes up exports.
This has been particularly true in nations such as the United States where, despite geopolitical tensions, mutual trade has nonetheless surged. In line with this, a facilitation of normal economic circumstances within China itself also has produced a rebound in local consumer demand and thus a surge in imports, promoting international recovery.
A rolling cycle of global recovery has emerged, with China is at the center adding to its momentum.
This sets China’s economy on an incredible pace for 2021. Of course, this is not without its risks. Things are slightly positive right now, but there is no absolute guarantee the COVID-19 pandemic will completely disappear. While the scenarios in some countries look positive, others continue to be rocked by their highest ever tallies of cases, plunging recovery into uncertainty.
Likewise, constant new mutations of the virus are going to be an ongoing problem for emergent vaccines to keep up with. This will make the global exit from the pandemic not black and white, but patchy and sometimes inconsistent.
In this case, while the picture is optimistic, the struggle is far from over. However, one thing is certain, and that is China’s recovery is simply a scale of “how high?” – as opposed to any fear of falling backwards.
Beijing has pulled itself out of a COVID-19 global slump with immense efficiency and has done so without having to pump trillions in stimulus into the economy in the way the EU, the U.K. and the U.S. have done. This shows the impressive resilience and certainty of its GDP in going forwards. Irrespective of the global condition, China will continue to be an engine of global growth and prosperity.