“The performance was better than we expected,” Ning Jiche, a spokesman for the China National Bureau of Statistics, told a news conference in Beijing.
Last year, the country canceled its growth target for the first time in decades as the pandemic dealt a historic blow to the economy. GDP shrank by nearly 7% in the first quarter as large parts of the country were blocked to limit the spread of the virus.
Since then, however, the government has tried to stimulate growth through major infrastructure projects and by offering money to stimulate spending among citizens.
Industrial production was a particularly large driver of growth, jumping 7.3% in December from a year earlier.
“In and out of the blockade before anyone else, the Chinese economy was moving forward as much of the world struggled to maintain balance,” wrote Frederick Neumann, co-chair of Asian economic research at HSBC, in a report from the study on Monday.
This has “put a floor under growth” in others regional markets, he added. Growing Chinese investment in infrastructure and real estate, for example, has been a boon for countries such as Australia, South Korea and Japan, which have exported supplies to China.
Trade was also strong. China’s total surplus for the year reached a record 535 billion dollars, which is 27% more than in 2019, according to statistics released last Friday. Analysts pointed out that the country took advantage of the high demand for security equipment and electronics as people around the world worked from home.
There are still some weaknesses. Retail sales lost some steam in December, up 4.6% from 5% in November. For the whole year, retail sales fell by 3.9%. A spokesman for the National Bureau of Statistics, Ning, blamed coronavirus revival in some places for declining sales.
“Sporadic ‘cases in China’ will lead to uncertainty [our] economic recovery, “ he added.
However, Ning said the country believes the pandemic is under control, and said authorities expect people to spend more money this year.
Analysts from Capital Economics, meanwhile, we believe the prospects are “bright” in the near future.
“Despite the recent decline in retail sales, we are seeing much higher consumption, as households are reducing the excess savings accumulated over the past year,” Julian Evans-Pritchard, a senior Chinese economist at Capital Economics, wrote in a note Monday. “Meanwhile, the back winds from last year’s stimulus should keep the industry and construction strong for some time to come.”