China’s growth rate fell to 40 in the fourth quarter of last year… lowest in a year and a half

China’s economic growth engine is rapidly weakening.

According to the National Bureau of Statistics of China on the 17th, China’s GDP growth rate in the fourth quarter of last year was 4.0%, the lowest level in a year and a half since the second quarter of 2020, when the impact of the spread of Corona 19 was in full swing.

However, the growth rate in the fourth quarter is slightly higher than the 3.6% market forecast compiled by Bloomberg.

China’s growth rate in the last quarter of last year rose to 18.3% in the first quarter thanks to the base effect, but showed a clear economic slowdown trend to 7.9% in the second quarter, 4.9% in the third quarter, and 4.0% in the fourth quarter.

China’s GDP in 2021 will reach 114.367 trillion yuan (about 21,442 trillion won), an increase of 8.1% from the previous year.

The growth rate was largely in line with the 8.0% market forecast compiled by Bloomberg.

Earlier, the Chinese government set its economic growth target for 2021 at around 6%.

However, at that time, the Chinese government set the target conservatively considering the high uncertainty, so there is a strong atmosphere in China that does not give much meaning to the achievement of the ‘around 6%’ growth target itself.

Experts believe that it is reasonable to average the results of 2020, when the growth rate plunged due to the shock of the COVID-19 pandemic, and 2021, when the growth rate was relatively high thanks to the base effect, in order to remove the distortion effect caused by the variables of the COVID-19 pandemic.

The average annual growth rate for 2020-2021, announced today, was 5.1%.

In the end, it can be seen that China’s growth rate has shown a downward trend from 6.0% in 2019, the year just before COVID-19, to 5.1% in 2020 and 2021, respectively.

Previously, China’s growth rate was 9.6% in 2011, 7.9% in 2012, 7.8% in 2013, 7.4% in 2014, 7.0% in 2015, 6.8% in 2016, 6.9% in 2017, 6.7% in 2018, and 6.0% in 2019. has gone down

The 2.2% in 2020 was the lowest in 44 years since the negative growth rate recorded in 1976, when the Cultural Revolution ended due to the shock of Corona 19.

China was considered one of the first countries to recover from the economic shock of Corona 19 among major countries in the world with a strong quarantine policy symbolized by ‘Zero Corona’, but in the second half of last year, China’s economic slowdown began to show clearly.

This was partly influenced by external factors such as soaring global raw material prices and supply chain bottlenecks, but harsh regulations by the Chinese government in a number of areas, including real estate, big tech (information technology giant), and education, led to a weakening of growth engines. There are many criticisms of

In particular, high-strength real estate regulations aimed at reducing debt in the real estate sector have put the real estate industry, which is estimated to account for nearly 30% of China’s GDP, into crisis, and the default ( default), which became a factor that shook the overall stability of China’s economy.

US investment bank JP Morgan pointed out in a recent report that “in the short term, the slowdown in the real estate market is the biggest threat to China’s macroeconomic and financial stability”.

In fact, it was found that real estate investment in 2021 only increased by 4.4% from the previous year.

The growth rate of fixed asset investment, which reflected real estate investment, industrial investment, and infrastructure investment, last year was only 4.9%, far below the double-digit growth rate of previous years.

While China is adhering to the ‘zero corona’ policy, the number of cities and regions under lockdown is rapidly increasing across China, such as Xian, a city with a population of 13 million, as the spread of Corona 19 has worsened since the end of last year. In particular, it is pointed out that it has a serious impact on domestic consumption and employment.

“China’s zero-corona strategy will help industrial production, but will cause great pain to consumption, especially the catering and travel industries,” Bloomberg News reported.

Retail sales growth in December last year was 1.7%, down from 3.9% in the previous month, the lowest level for the year.

As such, among export, investment, and consumption, which are evaluated as the three engines of China’s economic growth, investment and consumption were sluggish.

According to the announcement by the General Administration of Customs on the 14th, China’s exports in 2021 will increase by 29.9% from the previous year to $3.364 trillion (about 3996 trillion won) thanks to the ‘corona special’.

However, amid the prediction that the growth rate of exports, which has been driving China’s economic growth this year, will slow to the normal level, concerns are growing that China’s economic growth rate will fall below 5% next year as negative factors such as the contraction of the real estate market and the deepening of the spread of COVID-19 continue for the time being. have.

Amid concerns that the economic slowdown will solidify, recently, they are focusing on stabilizing the economy, putting ‘stable growth’ as ​​the top priority for the economy.

The People’s Bank of China, which lowered the reserve requirement ratio and the de facto base rate, the loan preferential rate (LPR), one at a time last month, broke the market’s expectations ahead of the announcement of the economic data on the same day and lowered the medium-term liquidity support window (MLF) rate, the policy rate, by 0.10 percentage points. During the cut, an additional cut in the LPR was announced on the 20th.

In a data released on the same day, the National Statistical Office of China said, “The domestic economy is facing ‘triple pressure’ while the external environment is becoming more complex and severe.” We will hold the 20th Party Congress victoriously while maintaining stability and stabilizing society.”

/yunhap news