China’s economic ascent is barely rising one year after its first coronovirus lockdown, as its success in controlling Kovid-19 could boost its share of global trade and investment.
According to a Bloomberg survey of economists, the world’s second-largest economy to report GDP growth in 2020 grew 2.1% on Monday, the only major economy that survives a contraction.
It should ensure that its share of the world economy grows at the fastest pace in this century. According to the World Bank, global production fell 4.2% last year, boosting China’s share of 2010 dollar prices to 14.5% – two years earlier than expected.
And it’s not just a nap that other big economies will start recovering as vaccines have rolled out. Economists expect China’s GDP to expand by 8.2% this year, beating global allies including the US
China is now ahead to pass the US as the largest economy in 2028, Homi Kharas, deputy director for the Global Economy and Development Program at the Brookings Institution, said two years earlier that it is faster than before.
After the understanding of President Donald Trump The trade war, China is deepening economic relations within Asia and Europe and seeking domestic consumption in the next phase of its development. President Xi Jinping said this week that “time and status” were on the country’s side in a new year marked by domestic turmoil in the US.
Read more: Upcoming Xi said that America recovers from the turmoil from China
If its local virus control success continues, the pandemic could help China “strengthen its position in the global economy”, said K Zeng, director of Asian studies at Arkan University. “The country is likely to be the only major source of growth in the post-pandemic world,” with the US and European companies likely to focus more on China.
The record jump in China’s global GDP share was one of several milestones for its economy last year:
- The economy converged with the US at the fastest pace on record. According to the International Monetary Fund, China’s GDP was 71.4% in 2020, which is 4.2% higher than the previous year
- Increased exports related to the epidemic increased share of global trade. According to official figures, shipments to China, already the world’s top exporter, increased by 3.6% in 2020. The probability of total world trade was 5.6%, According to the estimates of the UN trade and development body UNCTAD
- China likely won the title as the world’s top destination for foreign investment, losing to the US in 2015. Foreign investment in China reached more than $ 129.5 billion by November 2020, slightly higher than the previous year. Globally, FDI flows are likely According to UNCTAD it fell 30-40% year-on-year in 2020.
- Fortune Global 500 For the first time, the list of the world’s largest companies by revenue included more companies based in China than Hong Kong and America: 124 Vs. 121
- Full year movie box office receipts Surpassed america for the first time
- Sovereign debt was Added to the FTSE Russell Benchmark Index, the country’s inclusion in all three top global bond indexes was completed. foreign investors 1.1 trillion yuan ($ 170 billion) of Chinese bonds purchased in 2020
China’s increased role in the world after an epidemic increases the urgency of debate in the rest of the world about joining with Beijing. While the Trump administration has banned tariffs and reduced access to key technologies, other countries have sought closer trade and investment ties.
Fifteen Asian countries including China signed regional comprehensive economic partnership The treaty in November vowed to reduce trade barriers in the region. In December, the European Union agreed to a comprehensive Investment Deal with China.
TS Lombard’s chief China economist Bo Zhuang said, “Countries have to deal with the bipolar world rather than the unipolar world.”
What Bloomberg Economics Says…
“Not only China’s growth, but its growth pattern also matters for the global economy. China continues to push forward towards More reliance on consumption for development. For the rest of the world, China will increasingly become a consumer in addition to the long-played producer role. “
– Chang Shu, prominent Asia economist
China’s leaders typically topple the economic milestone, as its economic output overtook Japan in 2010, who were already wary of its ascent. Yet Beijing announced this year that its objective would be Double GDP from 2020 level to 2035, a target that reaches number one from March 1.
Still, there is no guarantee what will happen. China proved pessimists wrong in 2020, but faced major challenges Deteriorating relations with the US are likely limiting their access to technology, reliance on debt-funded investments, and a rapidly growing population.
Read more: See here how fast China’s economy is growing till America
China’s role as a factory in the world increased last year as it pumped out Face masks, medical equipment and work-at-home gear. While political leaders such as France’s Emmanuel Macron have vowed to build more at home after the epidemic – echoing American rhetoric “Decoupling” from China – Any change to diversify production will be gradual due to high costs.
Multinationals have one more reason to join or even link up with their investment in China: a rapidly growing consumer market, which is already eclipsing the US and Western Europe in some regions.
China now defines a quarter of the global middle class, defined as spending 11 to $ 110 per capita on the terms of the 2011 power parity, a milestone that the “Kovid-19 Had it not been for two more years, Khars of the Brookings Institution said, “Tea happened.”
Both General Motors Company and Volkswagen AG continue Last year, China sold more cars than its domestic markets. Starbucks Corp There are plans to open around 600 new stores this year, while Nike Inc. reported The first quarter of November saw sales in China of $ 2 billion.
“We have seen wave after wave of epidemics in various markets,” Naik’s chief financial officer Matthew Friend said on a December investor call. “And indeed, the only market where we have seen that the trajectory has continued in terms of virus management has been China.”
– assisted by James Mayer
()Update with details of bond purchase in bullet point.)