China’s GDP grows by 8.1% in 2021 despite pandemic

Wednesday, 19 January 2022 00:10 - - {{hitsCtrl.values.hits}}

BEIJING (AFP): China’s pandemic-defying GDP growth slowed in the final months of 2021, official data showed Monday in a worrying signal for the global economy as Beijing’s central bank cut a key interest rate.

The world’s second-biggest economy also reported the lowest birth rate since the founding of Communist China in 1949, adding to a looming

demographic crisis.

China’s economy, a key driver of global growth, expanded 8.1% in 2021 on its strong virus recovery, National Bureau of Statistics (NBS) data showed, beating forecasts of 8% in an AFP poll.

But much of that growth came in the first half of the year, with the economy shaken by a series of shocks towards the end of 2021.

China has been grappling with recent virus outbreaks, a cascading property market slump and a series of far-reaching regulatory crackdowns on some sectors.

Monday’s figures showed growth in the fourth quarter was the slowest in over a year, at 4%, down from 4.9% in the third quarter.

China’s Central Bank also cut the rate on its one-year policy loans to 2.85% – the first drop since early 2020 at the height of the pandemic and a clear signal that the year’s outlook remains uncertain.

NBS Spokesman Ning Jizhe warned Monday that “the domestic economy is under the triple pressures of demand contraction, supply shock and weakening expectations”.

The NBS also said the country’s birth rate hit a record low at 7.52 births per 1,000 people, with analysts warning faster-than-expected ageing could deepen economic concerns.

Changes to the strict “one-child policy” since 2016 have failed to result in a hoped-for baby boom, as changing mindsets and soaring costs of property make many young couples reluctant to have more than one child.

China’s “zero-COVID” policy has allowed life within its borders to largely return to normal.

Its factories mostly avoided shutdowns at a time of spiralling international demand as many major economies imposed painful lockdowns and work-from-home restrictions.

But its recovery in recent months was hobbled partly by a series of outbreaks as officials reimposed strict and sweeping containment measures that hit consumer demand.

Beijing’s drive to curb excessive debt and rampant consumer speculation also sent shock waves through a sector that had long been a key local driver for China.