China's GDP exceeded a threshold of 100 trillion yuan (15.42 trillion U.S. dollars) in 2020, according to data released by China's National Bureau of Statistics on Jan. 18.
With a 2.3% year-on-year GDP increase to 101.5986 trillion yuan last year, China was the first among the world's major economies to achieve positive economic growth in the pandemic-ravaged year, according to official data.
Under the impact of the COVID-19 pandemic, China's GDP saw a year-on-year decline of 6.8% in the first quarter last year. Q2 saw a turn from negative to positive economic growth, with a year-on-year growth of 3.2%, which was followed by a year-on-year growth of 4.9% in Q3, and a further acceleration to 6.5% year-on-year growth in Q4.
Crossing the 100-trillion-yuan threshold is of significance for China to complete the building of a moderately prosperous society in all respects, the country's first centenary goal, said Lyu Zheng, a Member of the Chinese Academy of Social Sciences (CASS). With its per capita GDP exceeding US$10,000 for two consecutive years, China has been ranked among upper middle-income economies. It is not far from the high-income threshold of US$12,500 GDP per capita.
The advance also came as China eradicated absolute poverty last year, with people's livelihoods continuing to improve, and residents' income growth and economic growth basically synchronizing, said Fang Ying, a professor from the School of Economics at Xiamen University. The country's economic structure has continuously optimized. The output and investment proportions, and growth rates of emerging industries, have far exceeded the average level. Energy consumption per unit of GDP has fallen, and the proportion of clean energy consumption has risen. Important progress has been made in high-quality development.
In 2020, China saw a trade surplus of US$535.03 billion, setting a new high in recent years and contributing to economic recovery, noted Xu Hongcai, deputy director of the Economic Policy Committee of the China Association of Policy Science. In addition, investment has played a key role. China's fixed asset investment (excluding rural households) increased by 2.9% compared with 2019. Investment in real estate, high-tech industries, health, and education saw a quicker recovery.
The progress in China's GDP and GDP per capita means that the basic livelihoods of 1.4 billion people have a national guarantee. At the same time, we should also see that China's internal development is still uneven, said Qiu Zeqi, a professor from the Department of Sociology at Peking University. In the new stage of development, China must focus on social justice while boosting economic growth.
Qiu suggested grasping the opportunity of China's transition from an industrial economy to a digital economy, transforming development driver forces to achieve sustainable and healthy economic growth. Meanwhile, it is also necessary to guarantee people's basic quality of life.
Huang Qunhui, director of the Institute of Economics at CASS, said that the pandemic has accelerated development of the digital economy and the intelligent economy. It is important to seize this opportunity and increase investment in new infrastructure to accelerate China’s economic transformation and upgrading.
Xu said that the country's new-type urbanization has entered a new stage, with urbanization rate expected to reach 75% by 2035. This will stimulate investment and consumption, and consolidate the foundation of domestic demand.
To facilitate economic and social development during the 14th Five-Year Plan (2021–2025) period, we must accelerate the construction of a new development pattern that smooths domestic circulation and lets domestic and international circulations reinforce each other, while accelerating the modernization of the national governance system and governance capabilities. Li Xuesong, Party secretary of the Institute of Industrial Economics at CASS, said that to build the new development pattern, reform and innovation must be the fundamental driving force.
In Fang's view, to ensure stable economic growth, we should further coordinate prevention and control of the pandemic and economic development.
Fang suggested ensuring the continuity and stability of macroeconomic policies, continuing to implement proactive fiscal policies and prudent monetary policies.
"We must take the expansion of domestic demand as an important starting point to ensure stable economic growth, deepen reforms to further form a strong domestic market, and further expand consumption through income distribution reform and system reform," Fang said. Moreover, it is important to adhere to high-level opening up.