China's economy grows 8.1% in 2021, slows in second half

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BEIJING – China’s system expanded by 8.1% successful 2021 but Beijing faces unit to enactment up enactment aft an abrupt slump successful the 2nd fractional arsenic the ruling Communist Party forced its immense existent property manufacture to chopped surging debt.

Growth successful the world’s second-largest system sank to 4% implicit a twelvemonth earlier successful the last 3 months of 2021, authorities information showed Monday. That was down from the erstwhile quarter’s 4.9% and an eye-popping 18.3% successful the archetypal 3 months of 2021.

Forecasters pass weakness volition persist this twelvemonth owed to renewed coronavirus outbreaks and the indebtedness crackdown. That has imaginable planetary repercussions, depressing Chinese request for steel, user goods and different imports.

China rebounded rapidly from the coronavirus pandemic, but enactment slowed arsenic Beijing tightened controls connected borrowing by the existent property industry, causing a slump successful operation that supports millions of jobs. That fueled user jitters astir spending and fiscal marketplace anxiousness astir imaginable defaults by developers.

“Downward unit connected maturation volition persist successful 2022,”Tommy Wu of Oxford Economics said successful a report. He said the authorities is apt to motorboat “policy support” to support yearly maturation supra 5%.

Growth successful user spending, the economy's biggest driver, plunged to conscionable 0.2% successful December from the erstwhile month's 3.9%. Growth successful concern successful factories, existent property and different fixed assets decelerated to 1.7%, down from the afloat year's level of 4.9%, arsenic developers canceled oregon postponed gathering plans.

Worsening weakness toward the extremity of 2021 prompted suggestions Beijing needs to chopped involvement rates oregon inject wealth into the system done nationalist works spending. The World Bank and backstage assemblage forecasters person trimmed this year’s maturation outlooks, though to levels supra those of astir different large economies.

On Monday, the Chinese cardinal slope chopped its complaint for medium-term lending to commercialized banks to its lowest level since 2020 during the pandemic.

Coronavirus outbreaks person prompted Chinese leaders to enforce question controls oregon outright lockdowns connected cities including Tianjin, a larboard and manufacturing halfway adjacent Beijing. That has wounded spending connected work industries. Industry analysts accidental processor spot manufacturing and different fields mightiness consciousness an interaction if the disruption lasts much than a fewer weeks.

“Economic momentum remains anemic amid repeated microorganism outbreaks and a struggling spot sector,” said Julian Evans-Pritchard of Capital Economics said successful a report.

Compared with the erstwhile quarter, the mode different large economies are measured, the Chinese system grew 1.4% successful the last 3 months of 2021. That was up from the erstwhile quarter's 0.2%.

Chinese exports, reported Friday, surged 29.9% successful 2021 implicit the erstwhile twelvemonth contempt a planetary shortage of semiconductors needed to marque smartphones and different goods and powerfulness rationing imposed successful large manufacturing areas.

Chinese exporters person benefited from reviving planetary user request astatine a clip erstwhile their overseas competitors are hampered by anti-virus controls. But economists accidental this year's commercialized maturation is apt to beryllium anemic and export volumes mightiness shrink owed to congestion astatine ports.

“With proviso chains already stretched to capacity, past year’s boost from surging exports can’t beryllium repeated,” said Evans-Pritchard.

Auto income fell for a seventh period successful November, declining 9.1% from a twelvemonth earlier, reflecting user reluctance to perpetrate to large purchases.

Chinese leaders are trying to steer the system to much sustainable maturation based connected home depletion alternatively of exports and concern and to trim fiscal risk.

One of the country's biggest developers, Evergrande Group, is struggling to debar defaulting connected $310 cardinal owed to banks and bondholders.

That has fueled fears astir different developers, though Chinese officials person tried to reassure investors immoderate interaction connected lending markets tin beryllium contained. Economists accidental a imaginable Evergrande default should person small effect connected planetary markets.

Factories successful immoderate provinces were ordered to unopen down successful mid-September to conscionable authoritative targets for vigor usage and vigor intensity, oregon the magnitude utilized per portion of output.

Asian fiscal markets were mixed Monday aft the Chinese involvement complaint chopped and information release. The Shanghai Composite scale gained 0.6% portion Hong Kong's Hang Seng dropped 0.6%.

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National Bureau of Statistics (in Chinese): www.stats.gov.cn

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