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China is set to report GDP numbers on Monday. Here’s what economists expect

A Chinese flag flies near apartment buildings in Beijing.

Greg Baker | AFP | Getty Images

SINGAPORE — China’s new economic data next week will likely confirm the country as one of the few economies that grew in 2020 despite challenges from the Covid pandemic, said analysts.

China will release official data on Monday which includes fourth-quarter gross domestic product — tracked as an indicator of China’s economic health, but which outside experts have long expressed skepticism over the veracity of the reports.

China was the first country to report cases of the coronavirus in December 2019.

While there have been pockets of occasional outbreaks in some regions, the Chinese economy has largely recovered since reporting a 6.8% year-on-year slump in the first quarter of 2020, when the country locked down to contain Covid-19.  

Economists polled by Reuters expect China’s recovery to accelerate in the final months of last year. They forecast a median 6.1% year-over-year jump in GDP in the fourth quarter — improving from the previous quarter’s 4.9% growth.  

Here’s what some economists are saying about the Chinese economy.

Nomura — stronger exports

Forecast: GDP growth of 5.7% year-on-year in the fourth quarter, and 2.1% year-on-year in 2020.

Stronger exports and a steady recovery in retail sales have helped China to extend its growth recovery into the final three months of 2020, said Ting Lu, chief China economist at Japanese bank Nomura.

“The resurgence of Covid-19 cases outside of China has been further bolstering China’s exports, especially of personal protective equipment (PPE) and work-from-home (WFH) electronics products, but this may also slightly delay the full recovery of the domestic services sector,” he wrote in a note.

“By contrast, mass vaccinations could lead to the final suppression of Covid-19 worldwide, which would be positive for the services sector but negative for China’s PPE and WFH product exports.”

ING — potential ‘upside surprise’

Forecast: GDP growth of 5.5% year-on-year in the fourth quarter

Dutch bank ING said its forecast for the Chinese economy could be “subject to an upside surprise” — meaning the actual figure could beat expectations. That’s because the export-led recovery has gained further momentum, it said.

ING noted that growth in Chinese exports “nearly doubled” to 17% year-on-year in the fourth quarter, from 8.9% in the third quarter.

“This should outweigh any possible softening of domestic demand due to the renewed virus threat,” the bank said in a note.

Barclays — catch up in services

Forecast: GDP growth of 6.5% year-on-year in the fourth quarter, and 2.3% year-on-year in 2020.

Services and consumption — main laggards in the Chinese economy — picked up pace in the fourth quarter of last year, said Jian Chang, chief China economist at British bank Barclays.

That will add to “sustained strength in exports and investments,” which powered China’s “strong economic recovery” in the second and third quarters last year, she said in a note.

Natixis — better outlook for 2021

Forecast: GDP growth of 6.3% year-on-year in the fourth quarter, and 2.3% year-on-year in 2020.

Various indicators have pointed to China’s success in containing the economic damage caused by the pandemic, said French investment bank Natixis.

“As China is likely to pass the freezing winter with continued scrutiny on the Covid-19, its economy is bound to improve, extending the current momentum toward a more solid economic rebound in 2021,” said the bank.

However, Chinese economic performance will also be affected by the external environment, “which will not only depend on global recovery on the back of effective vaccines and its rollout but also the evolution of the uncertain US-China relationship,” said Natixis.

— CNBC’s Evelyn Cheng contributed to this report.


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