China’s annual GDP growth rate in 2021 is expected to be 8.5pc, according to the Chinese Academy of Sciences (CAS). The academy forecasts a rapid rebound in 2021with high and low trends.
Economic growth in China is expected to be robust in first quarter of 2021 at 16.3pc and then slow to 7.3pc, 6.3pc and 5.9pc in Q2, Q3 and Q4, respectively. Consumption will driver the economy with a nominal growth of 10.7-11.7pc from a year ago.
Fixed asset investments are expected to stabilise and increase in FY2021, said the report. China’s fixed asset investments have steadily rebound in 2020 with robust investments in high-tech industries, livelihoods and animal husbandry. In 2021, annual fixed asset investment growth rate is estimated at about 7pc. Investment in infrastructure will rise along with the development of new industries and models that are expected to optimise the country’s investment structure.
Meanwhile, IMF has cut China’s 2021 growth rate to 7.9pc from the earlier forecast of 8.2pc amid tech decoupling, Hong Kong unrest and high domestic debt. Sino-US trade tussle could reduce dollar funding in Hong Kong and deny access to technology, while local government bodies’ debts have raised significantly low revenue in 2020. Debt is assumed to have reached 25pc of China’s GDP by December 2020. CAS suggested moderate supportive fiscal policy until the recovery stabilises and a cutback on government spending for debt sustainability.