China: GDP surpassed expectations in Q4 – UOB

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Economist at UOB Group Ho Woei Chen, CFA, assesses the lastst GDP figures in the Chinese economy.

Key Quotes

“China’s GDP growth accelerated further to 6.5% y/y in 4Q20 from 4.9% y/y in 3Q20, above Bloomberg’s consensus poll and our forecast of 6.2%. The economy has fully recovered from the coronavirus pandemic with the pace of GDP rising above the level in the same quarter a year ago. The growth rates of the secondary and primary industries were above their pre-pandemic levels while tertiary industry growth has also returned to trend in 4Q20. On the seasonally-adjusted basis, GDP rebounded by 2.6% q/q from 3.0% in 3Q20 as the recovery momentum continued to be sustained.”

“China’s full-year 2020 GDP growth came in at 2.3%, standing out as one of the few economies with positive growth amidst the pandemic. We have raised our forecast for 2021 GDP growth to 8.5% from previous 8.2% in anticipation of stronger pent-up demand as vaccination programs worldwide get underway. This will also underpin a stronger recovery in the domestic private consumption this year.”

“The economic data for December revealed some uneven recovery as retail sales and fixed asset investment (FAI) underperformed expectations while industrial production surged. Meanwhile, China’s survey jobless rate has stabilized at 5.2% in December, coming within the government’s target.”

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