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China’s economy grows as the rest of the world battles with coronavirus pandemic

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China’s economy grew more than expected last year, even as the rest of the world was upended by the coronavirus pandemic.

The world’s second largest economy expanded 2.3% in 2020 compared to a year earlier, according to government statistics released Monday.

It’s China’s slowest annual growth rate in decades — not since 1976 has the country had a worse year, when GDP shrunk 1.6% during a time of social and economic tumult.

But during a year when a crippling pandemic plunged major world economies into recession, China has clearly come out on top. The expansion also beat expectations.

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The International Monetary Fund, for example, predicted that China’s economy would grow 1.9% in 2020. It’s the only major world economy the IMF expected to grow at all.

The pace of the recovery appears to be accelerating, too: GDP grew 6.5% compared to a year ago, faster than the third quarter’s 4.9% growth.

“The performance was better than we had expected,” said Ning Jizhe, a spokesman for China’s National Bureau of Statistics, at a press conference in Beijing.

The country scrapped its growth target last year for the first time in decades as the pandemic dealt a historic blow to the economy. GDP shrank nearly 7% in the first quarter as large swaths of the country were placed on lockdown to contain the spread of the virus.

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Since then, though, the government has attempted to spur growth through major infrastructure projects and by offering cash handouts to stimulate spending among citizens.

Industrial production was a particularly big driver of growth, jumping 7.3% in December from a year earlier.

“In and out of lockdown ahead of everybody else, the Chinese economy powered ahead while much of the world was struggling to maintain balance,” wrote Frederic Neumann, co-head of Asian economics research at HSBC, in a Monday research report.

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