InvestorQ : How has China managed to grow its GDP at a time when most economies in the world are struggling to reduce the contraction in GDP?
diksha shah made post

How has China managed to grow its GDP at a time when most economies in the world are struggling to reduce the contraction in GDP?

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Arti Chavan answered.
1 month ago
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You are absolutely correct that at a time when the world economies are struggling to come to terms with GDP contraction, China has posted real GDP growth of 4.9% in the Jul-Sep quarter. This is as per the data released by the Chinese official news agency.

Remember that China had already recorded 3.2% growth in GDP in the previous quarter ended Jun-20. It was only the Mar-20 quarter when the Chinese economy actually bore the brunt of the contraction in GDP.

The gap in annualized growth rates becomes starker when it is compared with India. It maybe recollected that India reported -23.9% contraction in the Jun-20 quarter and IMF has projected a full year contraction of -10.5% for FY21, even in a best case scenario.

What is more is that according to the IMF, the Chinese economy is expected to expand by 1.9% in the year 2020 and that looks very likely with travel having expanded 80% yoy. The bigger question is how this kind of growth has been managed?

China was the first into the COVID crisis and also the first out of it. Most of the pain was seen in the first quarter ended March itself so it could bring about growth in the remaining quarters. That has differentiated in the case of China.

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