China’s economy grew 8.1% in 2021 and 4% in the fourth quarter, at a slower pace due to weaker demand, new restrictions from the pandemic and problems in the real estate sector.
It is the highest annual growth since 2011 (9.6%) of the world’s second largest economy and Brazil’s largest trading partner, but much of this performance took place in the first half of last year.
The quarterly result, on the other hand, slowed from 4.9% in the third quarter and was the weakest since the second quarter of 2020.
The Chinese economy, which has cooled over the past year, is now faced with headwinds in 2022, including persistent weakness in the housing market and the effects of the local spread of the highly contagious omicron variant.
Exports, which were one of the few areas of strength in 2021, are also expected to slow down as the government is expected to continue its crackdown on industrial emissions.
Recent coronavirus outbreaks in the period have resulted in strict lockdowns that hurt consumption.
At the same time, high-profile credit defaults by Chinese property developers, notably the Evergrande Group, were undermining confidence among real estate buyers and investors.
Slow growth will lead to monetary easing and fiscal support this year, economists predict, after the government last month pledged to maintain stability.
Policymakers have vowed to avoid a sharper slowdown ahead of a major Communist Party Congress later this year.
The central bank could also pump more money into the economy instead of cutting interest rates too aggressively, policy experts and economists said.
with Reuters
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