China’s economy grew 8.1% in 2021, but growth is slowing – WISH-TV | Indianapolis News | Indiana Weather forecast
(CNN) – China’s economy grew 8.1% last year, far exceeding the government’s own targets. But weaker growth in the final months of 2021 suggests trouble is still on the horizon as the country grapples with a deepening housing crisis, new COVID-19 outbreaks and the Beijing’s strict no-tolerance approach to controlling the virus.
This figure is roughly in line, if not slightly above, the expectations set by many economists. And it exceeds the Chinese government’s goal last year of growing its economy by at least 6% by 2021.
But GDP only increased by 4% in the last quarter of the year compared to the previous year. Although higher than the 3.6% growth forecast in a Reuters poll of analysts, it is still the slowest pace in a year and a half.
Growth in the fourth quarter was boosted by industrial production, which rose 4.3% in December from a year earlier, an acceleration from 3.8% growth in November.
But consumption has weakened considerably. Retail sales rose only 1.7% in December from a year earlier, significantly lower than November’s 3.9% increase.
China has recently faced a host of problems, including turmoil in its real estate sector and a series of COVID-19 outbreaks.
Struggling Chinese property developer Evergrande – which has total liabilities of around $300 billion – is struggling to pay its debts and was recently ordered to demolish a few dozen buildings in the country. Analysts have long feared that a collapse in Evergrande could trigger greater risks for China’s property market, hurting homeowners and the wider financial system.
Beijing’s unwavering insistence on eradicating all traces of the coronavirus, meanwhile, faces a huge test as authorities battle the accelerating spread of Omicron. And an outbreak of the older Delta variant recently forced the industrial hub of Xi’an into lockdown, affecting production lines at global chipmakers like Samsung and Micron.
Economists have warned that China’s zero-COVID approach to containing the virus could spell serious trouble for the economy in 2022. Goldman Sachs, for example, cut its projection for China’s economic growth in 2022 to 4.3% against 4.8%, just over half of the last figure of the year.