BEIJING (Fox News) - China’s economy rebounded in 2021 from its pandemic-induced slump helped by robust exports but the pace slowed further in the fourth quarter off the back of weak consumption and a property downturn, pointing to the need for more policy support.
Growth in the October-December quarter hit a one-and-a-half-year low, government data showed shortly after the central bank moved to prop up the economy with a cut to a key lending rate for the first time since early 2020.
The world’s second-largest economy is struggling with a rapidly cooling property sector, as well as sporadic small-scale COVID-19 outbreaks that could deal a blow to its factories and supply chains.
Several Chinese cities went on high alert ahead of the Lunar New Year holiday travel season, as the Omicron variant reached more areas including the capital Beijing.
The economy grew 8.1% in 2021, faster than a forecast 8.0% and well above a government target of “above 6%” and 2020’s revised growth of 2.2%.
Gross domestic product grew 4.0% in the final quarter, National Bureau of Statistics (NBS) data showed, faster than expected but still its weakest pace since the second quarter of 2020. Growth was 4.9% in the third quarter.
“At present, the downward pressure on China’s economy is still relatively big, and growth of residents’ employment and income is restricted,” Ning Jizhe, head of the NBS, told a news conference.
On a quarter-on-quarter basis, GDP rose 1.6% in October-December, compared with expectations for a 1.1% rise and a revised 0.7% gain in the previous quarter.
China’s economy got off to a strong start in 2021 but economists expect growth to slow in the coming months.
China’s central bank unexpectedly cut the borrowing costs of its medium-term loans for the first time since April 2020, leading some analysts to expect more policy easing this year to guard against developers’ mounting risk of default.
The People’s Bank of China said it was lowering the interest rate on 700 billion yuan ($110.2 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions by 10 basis points to 2.85%. It also cut the 7-day reverse repo rate.