By
Godfrey Benjamin
October 23rd, 2023
The fourth quarter and full-year growth record of the Chinese economy was the buy signal for many investors.
Despite the pangs of the coronavirus pandemic and the struggle towards recovery by most nations, the Chinese government stirred its economy to grow by 8.1% for 2021, a feat that was complemented by the impressive growth performance recorded in the fourth quarter of last year.
Per data released by China’s National Bureau of Statistics, Fourth quarter Gross Domestic Product (GDP) rose by 4% from the year-ago period. Comparing the data with what analysts were expecting, the country performed excellently on all fronts. The 4% growth in Q4 2021 was higher than the 3.6% that analysts from Reuters were expecting. The full-year performance of 8.1% is however lower than what Chinese economists expected, which is an average of 8.4% growth in 2021, according to financial data provider Wind Information.
Automobile production shot up by 3.4% on a year-to-date basis, the first increment since April last year. Industrial production grew 4.3%, ahead of the 3.6% that Reuters analysts were expecting. Fixed assets were up 4.9% for the year, real estate investments grew 4.4% and manufacturing managed a 0.4% growth within the same period under review.
The sectors of the economy that recorded the biggest growth include investment in manufacturing which grew by 13.5% in 2021 from a year ago, with special-purpose machinery recording the biggest gain, up by 24.3% year-on-year, according to data accessed through Wind.
The economy trackers did not all meet expectations as retail sales grew 1.7%, a figure way below the 3.7% polled by analysts.
“We must be aware that the external environment is more complicated and uncertain, and the domestic economy is under the triple pressure of demand contraction, supply shock, and weakening expectations,” the bureau said in a statement.
Chinese Stocks Rises as Economy Data Excites Investors
The fourth quarter and full-year growth record of the Chinese economy was the buy signal for many investors. The Shanghai Composite, SSE Composite Index (SHA: 000001) grew 0.58% to 3,541.67, the Shenzhen Component, SZSE Component Index (SHE: 399001) recorded a 1.51% growth to 14,363.57.
The data emanating from the Chinese economy also impacted other major economies in the APAC region, most of which saw their shares record a mixed performance. While the Nikkei 225 (INDEXNIKKEI: NI225) is up 0.74% to 28,333.52, the Korea Composite Stock Price Index or KOSPI (KRX: KOSPI) slumped by 1.09% to 2,890.10.
Across the Asia Pacific region, and around the world, the fears of Omicron are still stirring a number of restrictive policies that may place a little strain on recovery efforts. Despite the broad claim that Omicron is not as deadly as other previous variants, many governments, including China’s, are not leaving anything to chance and have instituted lockdowns when necessary.
“The better-than-expected GDP data doesn’t change the big picture: China’s economy is under multiple headwinds for now and a policy easing cycle is underway,” Larry Hu, chief China economist at Macquarie, said in a note.