China’s growth slowed in the last quarter

Status: 01/17/2022 08:25 a.m

Thanks to a strong first quarter last year, the Chinese economy grew more strongly than expected. But recently there have been clear signs of weakness, also due to the pandemic.

According to official figures, China’s economy grew by 8.1 percent in the past year, as reported by the Beijing Statistics Office. The growth in gross domestic product was therefore slightly better than analysts had expected on average. However, growth weakened significantly in the fourth quarter.

Compared to the previous year, the second largest economy grew by four percent between October and December. In the third quarter, growth was still 4.9 percent – after record growth of 18.3 percent in the first and 7.9 percent in the second quarter.

Triple pressure on domestic economy”

Statistics Bureau spokesman Ning Jizhe warned that “the domestic economy is under the triple pressure of a demand slump, a supply shock and weakening expectations.” Economists also expect significantly less growth momentum in the current year.

The strong plus over the year, the best value since 2012, can be explained primarily by the low basis for comparison due to the pandemic in the previous year. With a zero-Covid strategy, mass testing, quarantines and entry restrictions, the world’s most populous country got the virus under control faster than most other countries.

Great danger from omicron?

The further course of the pandemic is likely to be decisive for economic development this year. While countries around the world have started to live with the coronavirus, Beijing continues to lockdown despite a comparatively small number of cases. The government is particularly concerned about the spread of the highly contagious omicron variant. According to official information, the variant was first discovered in China last week.

Experts fear that there could be serious consequences for China’s economic development if there were lockdowns in many regions nationwide because of the Omicron variant, which would interrupt supply chains and paralyze factories.

Real estate market concerns

Most recently, it was mainly the strong exports that supported China’s growth. But foreign trade alone cannot compensate for other problems in the long run: The real estate market has cooled down, driven by uncertainties such as the crisis surrounding the real estate group Evergrande, which has debts of more than 300 billion US dollars. The government continues to work to reduce the high levels of corporate debt. Increased raw material costs and power outages due to energy shortages have also recently had a negative impact on the economy.

Reference-www.tagesschau.de

Leave a Comment