China a 'bright spot' for global economy

UNCTAD: Effective steps to control epidemic will lift GDP by 8.1% in 2021

China's growth will likely be a bright spot in the global economy as the country's GDP is projected to expand by 8.1 percent next year while the global economy is still facing recession risks as the COVID-19 pandemic has not been effectively contained, a new report said.

The United Nations Conference on Trade and Development said in a report on Tuesday that China, as one of the few large economies to witness growth this year, is expected to see its GDP grow by 1.3 percent this year before rebounding sharply by 8.1 percent next year, contrasting with an estimated 4.3 percent contraction of the global economy this year.

A senior official at the Geneva-based UN agency said that China's effective control of the pandemic has created greater space for the country to manage a strong recovery and to expand its domestic economy.

"China has obviously managed the pandemic better than other economies so far. It has a lot of domestic space to be able to manage a strong recovery. A lot will depend on policy choices. But we believe that China has the opportunity to seriously expand its domestic economy," Richard Kozul-Wright, UNCTAD's director of the division on globalization and development strategies, was quoted by Xinhua News Agency as saying.

The UN agency's optimistic projection on China is shared by other major international agencies as Beijing's timely and effective policies to restore economic and social activities have yielded positive results with the economy back on a steady track to recovery since the second quarter.

The World Bank earlier projected that China's economic growth will rebound to 7.9 percent next year while the Organization for Economic Cooperation and Development forecast in its latest report that China's GDP growth is expected to reach 8 percent in 2021.

Economists said that China will continue to see robust economic recovery for the rest of the year after the stronger-than-expected rebound of economic activities in August.

China's exports will maintain a mild growth rate while the growth in infrastructure investment will continue to be robust, while social retail sales may see a steady rebound, economists at UBS Securities said in a research note. They forecast that China's GDP growth in the third and fourth quarters will bounce back to between 5.5 percent to 6 percent.

But experts warned that the country's economic recovery could still be threatened by external risks and uncertainties as the COVID-19 pandemic is still threatening people's lives and normal social and business activities in many parts of the world.

UNCTAD said in its Trade and Development Report 2020 that the contraction of the global economy will leave global output by the end of the year over $6 trillion short of what economists had expected it to be before the COVID-19 pandemic began to spread. It means that the world is grappling with the equivalent of a complete wipeout of the Brazilian, Indian and Mexican economies.

It warned global trade will shrink by around one-fifth this year and foreign direct investment flows by up to 40 percent. It said that the world urgently needs coordinated public action for a faster economic recovery in the face of a deep global recession.