China's GDP increased by 2.3% in 2020
The National Bureau of Statistics of China disclosed on January 18th, 2021, the preliminary information about the country's gross domestic product in 2020. According to those figures, China's domestic product increased by 2.3% and reached RMB 101,598 bn (approximately USD 15,420 bn), exceeding the International Monetary Fund and the OECD estimates, which were expecting a growth limited to 2%.
Despite the significant impact of the pandemic that hardly hit the economy in the first quarter of 2020, China could resume business activities and support employment effectively through fiscal and financial supporting measures aimed to cut costs and fees. The policies, together with the measures for the prevention and control of the pandemic, including limitation to international and domestic travels, helped the economy recover at a fast and steady rate, after the GDP in the first quarter went down by 6.8%.
Besides the increase of the GDP, 2020 was also a record year for trade with international partners: in RMB, the total trade with foreign partners increased by 1.9% in 2020 (+1.5% in USD terms), with exports up by 4.0% (+3.6% in USD terms), driven by the sales of medical equipment and personal protective equipment devices: from March 2020 till December 2020, China exported protective masks worth USD 52 bn and billions of pieces of protective clothing, surgical gloves, goggles, ventilators, infrared thermometers, and testing kits.
In addition, to boost the economic recovery, Beijing has also promoted the concept of a dual circulation economy, consisting of two components: the internal circulation, which refers to the domestic economic activities, and the external circulation, which instead relates to the activities that China has with international partners. The dual circulation is aimed to fortify and improve the role of the internal consumption, which currently accounts for 55% of the total GDP, by increasing the available income to the residents, but also strengthen foreign investments, the Belt and Road initiative, establishing new free trade zones (three new FTZs were established in 2020 in Anhui, Beijing, and Hunan) and free trade agreements, such as the Regional Comprehensive Economic Partnership.
The Chinese economy will also grow strongly in 2021, with an expected growth rate of 8.2% according to the International Monetary Fund's latest forecasts, which highlights the importance of Beijing in leading the economic recovery in the Asian region and globally.