China GDP growth beats expectations, narrows gap with US, but population crisis, Covid-19 cloud outlook
- Gross domestic product (GDP) grew by 8.1 per cent last year, beating most expectations and Beijing’s target of ‘above 6 per cent’
- But GDP growth in the fourth quarter slowed to 4 per cent year on year, amid virus disruptions and a property market slowdown
China’s better-than-expected economic growth last year moves it a step closer to supplanting the United States as the world’s No 1 economy, but a tumbling birth rate is adding to a host of recent pressures, including uncertainty from the Omicron variant.
But GDP growth in the fourth quarter slowed to 4 per cent year on year, down from 4.9 per cent in the previous three months, hinting at more pain to come in 2022, amid a continued downturn in the property sector and sporadic Covid-19 outbreaks, as well as potential turbulence triggered by the US policy tightening and hostility from Washington.
China’s problems have been further complicated by a worsening demographic picture, as births dropped to 10.6 million last year from 12 million in 2020.
The falling birth figures will further hamper Beijing’s efforts to build a resilient domestic market, which has been plagued by virus disruptions over the past two years. Retail sales grew by only 1.2 per cent from a year earlier in December, down from 3.9 per cent in November. Overall in 2021, retail sales grew by 12.5 per cent.
