With Covid-19 under control, China’s economy surges ahead, as most of the world still struggles with the pandemic.
The Chinese economy marked 4.9% year-on-year growth in the July-to-September quarter and 6,5% in the last quarter of 2020, beating forecasts, while the US and the European Union will shrink 8% and 4.4% respectively, according to 80 economists interviewed by Bloomberg. These numbers bring China’s full-year expansion to 2.1%, likely making it the only major economy to see growth last year,even if this is still the country’s weakest pace in more than four decades.
Additionally, data showed that Chines export grew in December, as coronavirus disruptions around the world fueled demand for Chinese goods. And that is with a stronger yuan making export prices higher. Chinese companies are making up a greater share of the world’s exports, manufacturing consumer electronics, personal protection equipment, and other goods in high demand during the pandemic.
Single’s Day 2020 tremendous success offered a glimpse into the role consumption has played in the wider economic recovery and some economists maintain that households will soon be ready for a more sustained rush to spend after months of caution. In a recent report, Morgan Stanley economists forecast that private consumption would replace exports and infrastructure investment as the main catalyst for growth in China in 2021, with gross domestic product rising 9%., according to the Financial time. Goldman Sachs economists estimate that household consumption would increase 13% in 2021. “We believe private consumption recovery would be supported by unwinding of excess savings in 2020 (which is equivalent to 6% of annual consumption),” Morgan Stanley’s Chief China Economist Robin Xing and his team said, quoted by CNBC. The consumer spent recovery is not equal per sectors. While retail sales do not mark a notable growth, online retail sales grew around 26% only in October 2020.
E-commerce driving China’s economic recovery from Covid-19
This was a key headline message from a webinar delivered as part of a Victorian e-commerce network series by Global Victoria in partnership with Asialink Business. A parallel between SARS in 2003 and Covid-19 in 2020 was made and it was noted that traditionally pandemics result in sharp economic decline but can be followed by a sharp recovery. The previous SARS epidemic back in 2003, although leading to an economic crisis, was a catalyst for the emergence of e-commerce giants as Alibaba and JD, as millions of Chinese consumers and businesses were driven online to shop and sell. Similarly, COVID-19 has triggered new levels of online activity with 10% sales growth across the major platforms and that was only in the first quarter of 2020, as millions of people were encouraged to stay home and shop online. Needless to say, the most wanted category was and still is food and beverages, both from Chinese and foreign brands, but the pandemic has brought a change to import consumption with higher demand for at-home products, health supplements, skincare and beauty products, and, not surprisingly, low-calorie snacks.
Since China is the only major economy that has been growing in the past year and a half, a lot of foreign brands have shifted their focus to Chinese consumers even more than before. If you would like to learn more about the opportunities of expanding your business in China through cross-border e-commerce, feel free to contact us at firstname.lastname@example.org.