As China’s economy powers up, what’s the growth outlook for 2021?

Name: Demand for free food rises in US as nation’s Covid-19 pandemic crisis deepens
Uploaded: 2020-12-02T07:20:24.000Z
Duration: 2 min 26 s
Description: Demand for free food rises in US as nation’s Covid-19 pandemic crisis deepens

China has succeeded in containing the spread of Covid-19 and is at the forefront in the race for a vaccine, which will boost its economy. However, the scrapping of some stimulus measures will add downward pressure

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An employee works at a Shaanxi Automobile Holding Group factory in Xian, capital of northwest China’s Shaanxi province, on November 2. Photo: Xinhua

Aidan Yao

Published: 3:20pm, 2 Dec 2020Updated: 10:28pm, 2 Dec 2020

This year will go down in history as one of the most challenging for the global economy since World War II. A major public health crisis, triggered by a deadly virus, quickly turned into an economic disaster as governments around the world took drastic measures to restrict social mobility and shut down large portions of the economy.

At the initial epicentre of the pandemic, China implemented the strictest lockdown of all and saw its economy judder to a halt. Fortunately, the sacrifice was not in vain. The draconian measures proved effective in containing the virus, and the pandemic quickly eased.

The economy was swiftly restarted, propelled by significant policy easing, leading to a powerful rebound in economic activity, which is set to make China the only major economy to record positive full-year growth in 2020.

Looking ahead, the 2021 macro outlook is likely to feature a further normalisation of economic policies and easing of pandemic-related measures. Some of these developments – firmer control of the coronavirus and restoring organic growth engines – will add to the growth forecast, while policies that lead to reduced stimulus measures will adversely affect it.

Let’s start with the coronavirus. As the dominant economic driver of 2020, the pandemic has yet to be contained globally. Europe is in the midst of a second wave, while the US is confronting a virus resurgence without ever exiting the first wave.

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Demand for free food rises in US as nation’s Covid-19 pandemic crisis deepens

China has fared much better in keeping the pandemic under control. While there have been some small outbreaks since the initial one, the comprehensive official and public responses have proven effective in keeping infection numbers significantly below those in the US and Europe.