GDP in China
China - GDP (billions of U.S. Dollars)
GDP contracts for first time on record in Q1 2020 as coronavirus disrupts economy
Crippled by the fallout from the coronavirus pandemic, China’s economy logged its first GDP decline since at least 1992 in the first quarter of 2020. GDP contracted 6.8% in annual terms in Q1 2020, contrasting the 6.0% increase recorded in Q4 2019 and sharper than the 6.0% drop expected by market analysts. Seasonally-adjusted quarter-on-quarter GDP plunged 9.8% in Q1, contrasting the 1.5% rise in Q4 and even further below the 9.0% contraction forecast by the FocusEconomics panel.
Although the NBS does not provide a breakdown of GDP by expenditure, additional data suggests that all main GDP components declined at record rates in Q1.
In response, Chinese authorities have embarked on fiscal and monetary stimulus; however, the size of the measures have been rather limited compared to that implemented in the wake of the Global Financial Crisis or other economies affected by the pandemic. In this regard, Ting Lu, Lisheng Wang and Jing Wang, economists at Nomura, comment that:
“Despite its initial success in containing COVID-19, we believe hopes of a quick recovery are dimming, as China still faces two dire challenges: collapsing external demand due to the pandemic and the rising threat of a second wave of COVID-19 infections. […] We expect Beijing to deliver a large stimulus package soon to combat the worst recession in decades, with most of the financing to be provided by the PBoC. Specifically, we expect China’s actual broad fiscal deficit to rise to above 13% of GDP this year, which would imply a stimulus package worth ~10% of GDP.”
Looking forward, analysts are split about the strength and speed of the recovery. However, they all see that further policy action will be in the pipeline. Iris Pang, Greater China economist at ING foresees a “fat U recovery”:
“We expect that as long as strict social distancing measures are in place, China will have difficulty achieving a fast recovery. […] To further stabilise the jobs market, the central government will push harder on the “New infra” plan, to make sure that the local government special bonds issued so far this year at CNY1.1 trillion can be put into projects as soon as possible. But the difficulty is still that even getting enough capital, the projects need to run smoothly without strict social distancing measures, which we don’t think will be relaxed any time soon.”
Meanwhile, Raymond Yeung, Greater China chief economist at ANZ, pointed out that:
“Technically, the trajectory of China’s GDP growth is likely to show a V-shaped rebound to 7.9% in 2021, even though the level of output is unlikely to reach what the potential level implies for next year. […] Since structural growth is still the main source of economic expansion, the Chinese government’s stimulus will tend to target the segments which can provide a larger boost to employment and long-term productivity. China is unlikely to follow the US in using unlimited quantitative easing.”
Panelists now see GDP expanding 3.8% in 2020, which is down 1.8 percentage points from last month’s estimate. In 2021, the panel foresees economic growth of 6.7%. That said, more updated annual growth figures will be available on 28 April.
China - GDP (USD bn) Data
|GDP (USD bn)||10,464||10,922||11,247||12,313||13,837|
5 years of economic forecasts for more than 30 economic indicators.
|Bond Yield||3.17||-0.40 %||Dec 31|
|Exchange Rate||6.96||-0.19 %||Jan 01|
Get a sample report showing our regional, country and commodities data and analysis.
Request a Trial
Start working with the reports used by the world’s major financial institutions, multinational enterprises & government agencies now. Click on the button below to get started.
May 25, 2020
China’s top leadership decided to scrap its traditional annual growth target for this year, the first time since it was first established in 1994, highlighting the severity of the economic crisis facing the country.
May 18, 2020
House prices in 70 large- and medium-sized cities increased 0.5% in April in month-on-month terms according to a weighted average index calculated by Refinitiv from data issued by the National Bureau of Statistics (NBS).
May 15, 2020
Nominal urban fixed asset investment fell 10.3% in the first four months of the year compared to the same period in 2019.
May 15, 2020
Industrial output grew 3.9% compared to the same month a year earlier in April, which contrasted March's 1.1% decrease.
May 15, 2020
Retail sales fell 7.5% year-on-year in April (March: -15.8% yoy).