MacroscopeHow China can cushion the blow of sluggish global growth

Name: China’s economy accelerated at end of 2020, but virus-hit annual growth lowest in 45 years
Uploaded: 2021-03-08T19:30:18.000Z
Duration: 1 min 33 s
Description: China’s economy accelerated at end of 2020, but virus-hit annual growth lowest in 45 years

Although China’s economy is well on its way to recovery, global growth remains lacklustre

Beijing must work towards boosting domestic demand and burying the hatchet with Washington over trade

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Employees work on a dry-type transformer production line at an electrical production factory in Haian in eastern China’s Jiangsu province. Photo: AFP

David Brown

Published: 3:30am, 9 Mar 2021Updated: 4:56am, 9 Mar 2021

China’s economy is well on the road to recovery from the Covid-19 crisis and looks set to meet the government’s growth target of “above 6 per cent” for 2021, outlined in Beijing’s new five -year plan.

Exports are surging, factory output is building up steam and consumer demand remains robust thanks to all the government’s support measures since the crisis began in early 2020. There may be light at the end of the tunnel for the end of the pandemic, but there’s little room for complacency.

World trade is still operating well below par, and there is a risk that a sluggish global recovery will drag on China’s future growth prospects. Beijing can cushion the blow by boosting domestic demand, but arguments for burying the hatchet with Washington over trade are even greater now.

The prospects for building better global trade relations might have improved dramatically in the wake of Donald Trump’s departure from office, but there is still a lot of bridge building to be done between the three major super-economies – the US, China and the European Union – to repair the damage.

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China’s economy accelerated at end of 2020, but virus-hit annual growth lowest in 45 years

The trade war, which erupted between the US and China soon after Trump’s election in 2016, dealt a bitter blow to global economic well-being, with the effects being compounded by the Covid-19 pandemic.