20.12.2021
The global pandemic has been going on for two years, as a result of which, many countries have introduced radical control policies to save their economies. Regarding China, it can be argued that the Chinese Government clearly adheres to the Zero Tolerance Policy (ZTP), while some countries prefer a more open approach. Throughout the pandemic, China’s GDP has continued to grow, while the economies of other countries are experiencing particular difficulties.
According to the World Bank, China is the only major economy to report economic growth in 2020. Moreover, many organizations, such as the International Monetary Fund, have predicted that China’s expected GDP will grow by 8 percent in 2021.
Most media outlets report that thanks to numerous measures related to investment, foreign trade and consumption, China’s GDP will continue its upward trend in 2021.
The primary reason for China’s economic recovery is based on the Zero Tolerance Policy (ZTP).
According to the South China Morning Post, “China’s position of zero tolerance for the COVID-19 pandemic has helped it recover quickly from the public health crisis.”
Moreover, the BBC believes that strict measures to contain COVID-19 and emergency assistance for businesses have helped China’s economy recover. The Zero Tolerance Policy (ZTP) is of great importance between China and the rest of the world. »China’s economy has experienced a strong recovery, while the rest of the world is struggling with anemic demand, the loss of millions of jobs and the closure of enterprises,” the BBC reports. The Zero Tolerance Policy (ZTP) effectively curbs the spread of COVID-19 and leads to a steady increase in exports from mid-2020. This has allowed production in China to quickly return to normal and ensure supplies to other parts of the world when production in other countries is stagnating.
Critics say the Zero Tolerance Policy (ZTP) will increase costs and reduce benefits in the future. However, politics is the method that has successfully contained the pandemic. If not for this policy, the economy of many countries would have suffered a more serious collapse after the appearance of a new subspecies of the Omicron coronavirus strain.
Based on a study by mathematicians at Peking University, “China could face more than 630,000 COVID-19 infections per day if it abandons its zero tolerance policy by lifting travel restrictions.”
The second reason is the growth of consumption, which has maintained its trend and exclusively benefited the economy of the Celestial Empire.
A recent report by the National Bureau of Statistics of China shows that retail trade in the country has maintained its economic growth. As an excellent example of increasing public consumption, sales on “Bachelor’s Day” (celebrated annually on November 11) this year also set a new record. The latest data published and JD.com Alibaba, show that public consumption during the holiday still keeps pace. The two platforms earned a total of 889 billion yuan (US$139 billion) in 2021, breaking the online sales record they reached last year.
According to the Asian Times, China showed GDP growth in the third quarter, despite the fall in real estate prices, which is explained by the resilience of the country’s consumers. The econometric software Eviews calculated that “GDP consumption data correspond to retail sales reports.” This means that the level of consumption of the population is the same as in the period before the pandemic.
The third reason was China’s foreign trade, continued stable growth, and foreign investors who are optimistic about China’s future development.
Foreign trade is one of the most accurate economic indicators. The total value of China’s goods trade in the first three quarters amounted to 4.37 trillion US dollars, an increase of 22.7 percent compared to the same period last year. Exports grew by 22.7 percent and amounted to 2.4 trillion US dollars, while imports amounted to 1.97 trillion US dollars with a growth rate of 22.6 percent. Compared to the same period in 2019, China’s imports and exports increased by 23.4 percent — exports by 24.5 percent and imports by 22 percent. All these figures exceeded market expectations.
Nicholas Lardy, a senior researcher at the Peterson Institute, said in an interview: “China is not growing at 10 percent, but they are still growing faster than everyone else.” He pointed out that China is rapidly attracting foreign direct investment, and when the trade of other countries declined last year, China’s trade has grown and will support growth.
According to the Financial Times, the global assets of Chinese investors in Chinese stocks and bonds have grown by about $120 billion in 2021, despite Beijing’s recent regulatory measures against the private sector. By the end of September 2021, international investors owned 7.5 trillion yuan (1.1 trillion U.S. dollars) worth of stocks and fixed income securities, which is about 760 billion yuan (117 billion U.S. dollars) more than at the end of 2020.
Author: Ospanova Zhanerke
Links:
1. China was the only major economy that grew in 2020 | Daily Mail Online
2. The pandemic cannot stop China’s GDP growth-Scientific and Technical News-English Channel (stdaily.com
3. Covid-19: China’s economy is gaining momentum, overcoming global trends – BBC News
4. Study warns China of a “colossal outbreak” of COVID-19 if it opens up like the US, France (moneycontrol.com )
5. Statistical Communique of the People’s Republic of China on National Economic and Social Development for 2020 (stats.gov.cn )
6. The collapse of the Chinese economy? Count for yourself – Asia Times
7. Global stocks of Chinese stocks and bonds will grow by $120 billion in 2021 | Financial Times (ft.com )
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