The Chinese economy showed strong resilience and a robust rebound amid COVID-19. It not only made China the only major economy worldwide with positive growth in 2020 but also injected impetus into the global economic recovery.
The growth momentum should continue into 2021, with increased green development, sci-tech innovation, and an industrial production rebound. It will bring more opportunities for the world, analysts said.
The following are five key phrases that offer a glimpse into the outlook of the Chinese economy in 2021.
China’s economy is likely to return to its normal growth trajectory this year. It marks a good starting point for economic progress in the country’s 14th Five-Year Plan period, analysts said.
A slew of counter-cyclical adjustments on addressing the COVID-19 economic fallout achieved remarkable results in 2020. It led to economic indicator growth, pickups in industrial activities, and resumption in services sectors, according to a blue paper released by the Chinese Academy of Social Sciences (CASS).
China’s economy is likely to further stabilize and achieve high-quality growth in 2021 and beyond, given favorable conditions such as a massive domestic market and rising urbanization rate.
It is feasible for China to double the size of its economy or per capita income by 2035, as long as economic growth stays at an appropriate level and the renminbi exchange rate against the U.S. dollar is stable. So said Wang Hongju, a researcher with the CASS.
China called for a “green recovery” during a series of high-profile international conferences, pledging to peak carbon dioxide emissions before 2030 and achieve carbon neutrality before 2060.
To that end, the country will formulate an action plan for peaking carbon dioxide emissions before 2030. It would offer support to areas with favorable conditions to enable them to peak the emissions ahead of schedule, according to the annual Central Economic Work Conference held in December 2020.
Green industries will become a new growth driver, said Zhang Hui, deputy head of the College of Economics and Management at Nanjing Forestry University. He added that the concepts of China’s high-quality development, such as environmental protection, will force traditional sectors to pursue green development and enable more green industries to emerge.
China has put innovation high on its agenda, making it one of the key driving forces to boost economic and social development.
Official data showed value-added output by China’s high-tech manufacturing sector saw a 5.9-percent growth in the first three quarters of 2020, 4.7 percentage points higher than the overall industrial output growth.
China will pursue innovation-driven development and shape new development advantages, according to the full text of the Communist Party of China Central Committee’s development proposals made public in late October.
The country will uphold the central role of innovation in its modernization drive and take self-reliance in science and technology as the strategic underpinning for national development.
RESUMPTION AND UPGRADE
China will likely see steady improvements in both supply and demand sides in 2021. It is due to factory production and consumption regaining growth momentum amid strengthening economic recovery.
In the first 11 months of 2020, China’s major industrial firms’ profits expanded by 2.4 percent year on year to more than 5.74 trillion yuan (about $887 billion). It widened by 1.7 percentage points from that in the first ten months.
The trend of industrial recovery and upgrade would be more notable in 2021, said Zhu Baoliang, chief economist at the State Information Center. He cited growth in sectors such as information transmission, software and information technology services, and manufacturing investment recovery.
Consumption will also rebound in 2021 due to the availability of COVID-19 vaccines and the implementation of measures boosting domestic demand, said Zhu.
COMMITMENTS TO OPENING-UP
China further strengthened connections with the rest of the world in 2020, with the signing of the landmark Regional Comprehensive Economic Partnership and the conclusion of negotiations for the China-EU investment treaty.
With these agreements in 2021, China will achieve a higher level of regional economic integration with southeastern Asia and Europe, said Tu Xinquan, a professor at the University of International Business and Economics.
Tu said these efforts would lay a sound foundation for China to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and facilitate the negotiations on the China-Japan-ROK free trade agreement.
The rollout of opening-up measures demonstrated China’s determination to open its domestic market to the world and engaging in the world economic system, which will eventually benefit consumers globally, Tu added.