Under the severe situation of the global epidemic situation, China's economy has handed over a fairly good answer sheet. On January 17, the National Bureau of Statistics released China's economic data for 2021. According to preliminary calculations, the annual GDP 1143670 billion yuan, an increase of 8.1% over the previous year at constant prices.
"The fourth quarter grew 4% year-on-year, the full-year increase of 8.1%, and the Industrial Value Added figures for December were higher than we expected." Many experts and foreign media, including Oxford Economics senior economist Hu Dongan, pointed out the highlights of China's economy in 2021.
On the other hand, China's economy still faces challenges and opportunities. China has always adhered to a dynamic zero-clearing policy and avoided paying the same heavy humanitarian costs as Europe and the United States. Under this premise, China's GDP is still growing by 8.1%. However, from a quarterly point of view, the mainland's economic growth rate is not even. In the third and fourth quarters of last year, the downward pressure on China's GDP continued to increase. The impact of Chinese mouth on the economy has also become the focus of foreign media.
"Overall, in 2021, the mainland's economy will continue to recover steadily, economic development and epidemic prevention and control will maintain a leading position in the world, and the main indicators will achieve the expected goals." At the same time, we must also see that the external environment is becoming more complex and severe and uncertain, and the domestic economy is facing the triple pressure of demand contraction, supply shock and expected weakening. In the eyes of foreign media, this statement of the National Bureau of Statistics has become the best annotation of the current Chinese economy.
Foreign media: These data are higher than expected, and there is a bright spot
On the morning of January 17, after the National Bureau of Statistics released the 2021 China economic data, foreign mainstream media, including Reuters, the Wall Street Journal and the Financial Times, quickly released long-form reports and interpretations of the Chinese economy. In their view, some of the data of China's economy is higher than previous forecasts.
Judging from the annual data, China's GDP for the whole year of 2021 1143670 billion yuan, an increase of 8.1% over the previous year at constant prices. Reuters and the South China Morning Post note that this figure is not only higher than the government's target of 6% of annual GDP set last March, but also slightly higher than the 8% growth forecast by international financial institutions and economic organizations.
China Factory Infographic
The Wall Street Journal wrote: "As exports soar to record highs, China's GDP figures easily exceed the official growth target of 6 percent or more set by the government." The 8.1 percent growth figure for 2021 is also in line with economists' forecasts, providing a boost to China's recovery after the COVID-19 pandemic. ”
Compared with the previous three quarters, China's GDP growth slowed in the fourth quarter, at 4%. However, this figure also exceeded the Reuters earlier forecast of 3.6%.
Reuters believes that one of the bright spots in China's economy is the industrial added value. In December last year, the added value of industries above designated size increased by 4.3% year-on-year and 0.42% month-on-month. That's higher than Reuters' previous forecast of 3.6 percent.
The national fixed asset investment for the whole year was 544547 billion yuan, an increase of 4.9% over the previous year, slightly higher than the 4.8% predicted by the outside world.
In an interview with the South China Morning Post, Oxford Economics' chief China economist, Hu Dongan, said: "GDP grew 4% year-on-year in the fourth quarter of last year, 8.1% in 2021, and the industrial value added data in December were higher than we expected. ”
However, from the perspective of data, there are still many challenges in China's economy. Reuters and other media have noted that due to a series of regional COVID-19 outbreaks at the end of 2021, China's retail sales in December were lower than expected, up only 1.7% from the same period last year, the slowest growth rate since August 2020. Analysts quoted by Reuters had previously expected retail sales to rise 3.9 percent in November and continue to rise 3.7 percent after that.
In addition, on the 17th, the central bank's website issued an announcement that in order to maintain the reasonable and sufficient liquidity of the banking system, on January 17, 2022, 700 billion yuan of medium-term lending facility (MLF) operations and 100 billion yuan of 7-day open market reverse repurchase operations were carried out, with winning interest rates of 2.85% and 2.10% respectively, and the winning interest rates fell by 10 basis points.
The Financial Times said the data and policies showed that China's economy had "lost momentum.". The Wall Street Journal said relatively euphemistically that this indicates that the momentum of China's economic growth has "slowed down".
The U.S. Consumer News and Business Channel analyzed that China's industrial output has been growing steadily in 2021, offsetting the impact of declining retail sales.
But the South China Morning Post believes that China's annual GDP growth is higher than the International Monetary Fund's forecast of 6% of U.S. GDP growth last year. "This marks a further economic catch-up between China and the United States." The United States has not yet released official GDP data for 2021, but according to the International Monetary Fund's forecast of the United States, China's total GDP in 2021 has reached about 77.3% of the United States.
"The challenge for China this year is: ......”
The Wall Street Journal argues that China, as the world's second-largest economy, is challenged this year to maintain its continued recovery after the pandemic by pushing for long-term economic reforms to reduce inequality, debt, and dependence on the world at a time when economic growth is slowing.
China's economy experienced two "very different chapters" last year. In the first half of the year, GDP soared 12.7% year-on-year as the export-led economic recovery "made progress". "This number is encouraging compared to the initial dark days of COVID-19."
But in the second half of the year, China's economy was affected by soaring global commodity prices, power outages, global supply chain chaos, semiconductor shortages, and rising numbers of COVID-19 infections around the world.
The overall weakness in China's economic outlook is largely due to the COVID-19 pandemic. The COVID-19 pandemic is also constantly "torturing" the world with new variants.
For the slowdown in the growth rate in the third and fourth quarters of 2021, Liu Yuanchun, vice president of Renmin University, said in an interview with Focus Interview: The most prominent problem is the lack of cabinets, cores, electricity, coal and labor in this supply chain caused by the impact of the epidemic. The impact of commodities has led to a large number of middle and lower reaches of enterprises and some small and medium-sized enterprises to bear a lot of costs, resulting in some decline in our economic vitality. We must also see some factors at a deeper level, that is, the adjustment of some policies and the implementation of strategies have produced a superposition effect and the phenomenon of "several meetings".
Observer Network columnist Chen Jing believes that in the second half of 2021, the growth rate of investment and consumption declined, and the economic growth rate declined, the specific reason should be multiple superpositions, and indeed encountered some unfavorable situations. The pressure of epidemic prevention and control has increased, there is a gap in the supply of energy prices, and a shortage of chips, which has caused a "supply shock". In addition, there have been major expected changes in many industries, real estate sales in the second half of the year are not smooth, the disorderly expansion of the Internet industry has been rectified, the education and training industry has contracted sharply due to the double reduction policy, and the carbon peak energy conservation and emission reduction targets have a considerable impact on coal supply.
Chen Jing believes that the economic growth rate of 4.9% and 4% in the third and fourth quarters is not satisfactory, not that China has only so much capacity, but that the government has not exerted force. There is also no urgency in 2021, and 8.1% is very good internationally. But in 2022, if the economy grows below 5%, it feels really low. Therefore, pulling economic growth back to the 6% track, or at least around 5.5%, should be a reasonable expectation.
Liu Yuanchun believes that there is definitely still room for China's economic growth rate, and at the same time, China's macroeconomic policy space is also very large, and there is absolutely no problem in order to make our economic growth rate have another significant increase. If we adopt a macro policy of "flood irrigation" and super relaxation like Europe and the United States, it will definitely bring a large number of sequelae, thus affecting the future high-quality development.
Another major concern is the population data released by the Bureau of Statistics. On January 17, data released by the National Bureau of Statistics showed that the national population at the end of 2021 was 1,412.6 million, an increase of 480,000 over the end of the previous year. The annual birth population is 10.62 million, and the birth rate is 7.52 ‰.
What is the relationship between population and the economy? Barbara M. Fraumeni, a professor at the Central University of Finance and Economics quoted by Barron's on the 17th, said that her team's analysis found convincing evidence that young new employees who are about to enter the labor market have higher human capital in education and other aspects, which makes employees more valuable economically. In a way, a more productive workforce will make up for less labor.
Ning Jizhe, director of the National Bureau of Statistics, responded at the press conference on the 17th that the problem of birth population reduction is the result of the comprehensive impact of various factors. The slowdown in population growth is an objective result of the mainland's economic development, especially industrialization and urbanization, to a certain stage. Aging and low birthrate are also common problems faced by developed countries and even some emerging economies.
When reporting on China's GDP, foreign media invariably quoted this statement from the Statistics Bureau: "Overall, in 2021, the mainland's economy will continue to recover steadily, economic development and epidemic prevention and control will maintain a global leading position, and the main indicators will achieve the expected goals." At the same time, we must also see that the external environment is becoming more complex and severe and uncertain, and the domestic economy is facing the triple pressure of demand contraction, supply shock and expected weakening. ”
Chen Jing expects that China's economic growth momentum in 2022 will rebound significantly from the second half of 2021, reversing the expectations that have been relatively sluggish for some time. Of course, the problem was not much, it was all within the regulatory framework. In 2021, some targets have been switched in, and in 2022, it will be better integrated into the regulatory framework, and market sentiment will improve significantly.