China’s economic nightmare from wisepowder's blog

China’s economic nightmare

China’s economy reportedly grew 6.5 percent in the final quarter of 2020, indicating a strong recovery from the coronavirus pandemic. The figures, released by China’s National Bureau of Statistics, were slightly higher than those predicted and continued growth from the 4.9 percent increase recorded in the third quarter. The fourth quarter figures mean that overall, in 2020, China’s GDP grew 2.3 percent over the course of the year – making it the only major global economy to avoid a contraction.To get more economy news today, you can visit shine news official website.

But the third quarter growth “was met with mild disappointment” and “markets had expected larger expansion”, according to the Harvard Business Review.

While financial experts have projected China to “continue to whittle away the US's economic lead over the next five years,” they added that “it isn’t a given” during these turbulent times.The report adds: “Structural problems persist in areas such as overcapacity in the industry, elevated debt levels, and inequality.

“What’s more, years of tensions with Donald Trump have hurt external competitiveness, while China’s aggressive foreign policy is generating increasing international pushback.”Former chief economist at the People’s Bank of China Ma Jun claimed local governments are under pressure to meet unrealistic economic growth goals.

He warned that continuing to set GDP targets may worsen the debt risks, which could increase their already high borrowing levels in a bid to meet “unrealistic growth goals”.

Instead, Mr Ma said Beijing should focus on stabilising employment and controlling inflation.He added that, while Beijing should use GDP forecasts in fiscal and investment planning, they should not be used as “an indicator for evaluating the performance of local government officials”.

He told the South China Morning Post on Wednesday: "By emphasising GDP assessments, it is inevitable that some locals will falsely report the rate of economic growth.”