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China: how to explain the 8.1% growth increase, a record for 10 years

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China seems to be turning its back on the crisis, at least economically. Beijing has published its growth figures for 2021 with an 8.1% increase in GDP, a figure not reached for ten years. This is its fastest pace since 2012. How to explain this rebound in the midst of a pandemic?

TO ANALYSE

China achieved annual growth of 8.1% in 2021, the highest in nearly a decade, despite a real estate crisis and an epidemic recovery which are weighing on the recovery of the Asian giant. This is its fastest pace since 2012. How to explain such a rebound in the midst of a pandemic?

Growth driven by exports

This dazzling growth in China is primarily driven by exports, which increased by nearly 30% last year. The majority of these exports concern emerging countries. And, it’s not just masks but also steel, machinery and infrastructure. We see that the real estate crisis, which represents a quarter of Chinese GDP, and the containment linked to Covid, which affects tens of millions of people, ultimately did not really weigh.

The picture is not completely rosy, however. Indeed, China remains only the factory of the world. Household consumption remains weak. Small businesses and services are therefore suffering, with repeated bankruptcies and ten times fewer business creations than in 2019. Youth unemployment is also a concern, around 15%, three times more than the national average.

The “zero Covid” policy, which made it possible to rapidly stem the epidemic in 2020, comes with a high social and economic cost. The service sector (leisure, tourism, hotels and restaurants, transport, etc.) has still not returned to its pre-pandemic level. Growth should therefore slow down this year to stand at around 5%.

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