Why did China become the only country to grow in 2020?
In November of 2019, the epidemic began in Wuhan, China. However, the nation where the epidemic started was the only one whose GDP increased in the following year. Why did that happen?
China's government announced a 4.9% increase in GDP from July to September 2020, compared to the previous year. Although this is lower than economists' expectations of 5.2%, it still places the world's second-largest economy in the vanguard of the recovery in terms of GDP (GDP).
The fact that China was the first country to contain the epidemic is likely the driving force behind this growth. With an authoritarian government imposing stringent quarantine restrictions in the early months, they were able to move forward in reducing coronavirus infections. A man who visited Wuhan, his birthplace, and then went to Osaka the next day was sentenced to two years in prison for violating the quarantine order.
Nonetheless, this cannot be the main cause; China's job generation is quite consistent, resulting in increased consumption. However, we cannot conclude that COVID-19's drag has been removed. China has long been an exporting country, and although demand for many items decreased, demand for pandemic-related products such as half masks, goggles, gloves, and other protective gear increased significantly.
China's central bank increased assistance for growth and jobs in early 2020 by implementing expansionary monetary policies. The Central Bank has stated that such assistance will be reduced by the end of 2021, resulting in a more "flexible and tailored" monetary policy. In 2020, the government boosted public expenditure by providing special incentives to citizens, resulting in a rise in consumer spending of US$561.000 billion.
The services sector had previously shown a robust rebound in April-June, which was consolidated between July and September. According to official figures, the tertiary sector grew by 4.3%, boosted by software and information firms, telecommunications, transportation, and financial services (the latter with a rise of 7%).
Tourism has a significant influence on the Chinese economy. People in China were unable to travel outside of the nation due to the epidemic, thus during holidays such as the "Gold Week," they could only travel within the country, resulting in increased consumption and income of US $ 69.6 billion in only eight days.
"Domestic tourists and travelers have certainly aided the recovery by spending their money at home because they are still unable to travel overseas because of global restrictions," the Chinese government stated.