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China's growth projected to pick up to 7.9%

By ZHAO HUANXIN/CHEN JIA | China Daily | Updated: 2021-01-07 07:16
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Container ships dock at Qinzhou Port in China-ASEAN Free Trade Area in Qinzhou, Guangxi Zhuang autonomous region, Nov 19, 2020. [Photo/Xinhua]

World Bank: Resumption of production, exports fuels nation's economic recovery

China will continue to lead the world's economic recovery in 2021, fueled by the sustained expansion of industrial production and exports, economists said on Wednesday.

The comments came after the World Bank updated its projection for China's 2021 economic growth, which is set to accelerate to 7.9 percent, up 1 percentage point from its forecast in June.

China's faster recovery was based on the release of pent-up demand and a quicker-than-expected resumption of production and exports, the bank said in its January 2021 Global Economic Prospects published on Tuesday.

Stronger economic performance in China was "an exception" amid the global slowdown, it said, while disruptions due to the COVID-19 pandemic in most other emerging-market and developing countries were more severe than it had previously envisioned.

The global economy as a whole is projected to grow by 4 percent this year, after a 4.3 percent decline in 2020, assuming an initial COVID-19 vaccine rollout becomes widespread throughout the year. The pandemic has had a major impact in terms of death and illness and may depress economic activity and incomes for a prolonged period, the bank said.

Despite uncertainties in the external environment, a number of leading economists forecast that China's GDP growth in the first quarter may hit 15 percent year-on-year or even higher, due to the low base. It contracted 6.8 percent in the same period of 2020.

Liu Qiao, dean of Peking University's Guanghua School of Management, predicted that China's GDP growth rate is likely to be 18 percent in the first quarter, supported by targeted fiscal and monetary policies launched after the COVID-19 outbreak.

Uncertainties regarding external demand may however add downward risks to China's economy this year, and it still needs time to boost domestic consumption, Liu said.

In addition, China's manufacturers have been expanding production and exports since mid-2020. And a better connected supply chain in the Asia-Pacific region has boosted exports, according to Steve Cochrane, chief Asia-Pacific economist at Moody's Analytics.

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