China looks on course to be the economic powerhouse of the world by the end of 2020.
With the coronavirus pandemic still crippling much of the world, China’s retail sales for August rose 0.5% from a year ago.
China became the world’s second largest economy behind the US and the number one contributor to world economic growth by 2019 and is destined to be the world’s largest consumer market in 2020.
Jim O’Neill, former chief economist at Goldman Sachs, told CNBC that China now was the most important economy in the world.
“I suspect Chinese GDP growth could actually end 2020 as net positive still,” O’Neill said. “By end 2021, Chinese GDP growth will have possibly even made up for not only the losses but the loss in the trend also.
“I suspect China will continue to be the most important marginal driver of global GDP.”
The Asian Development Bank has also predicted China’s economy will fare considerably better than the rest of the world this year.
— China Xinhua News (@XHNews) September 21, 2020
China reported that its Gross Domestic Product grew 3.2% in the second quarter of this year, compared to a year ago. It was the only country to see an increase in its Gross Domestic Product in the second quarter of 2020.
Every other country saw their economy contract in the second quarter of 2020: Russia -3.2%, South Korea -3.2%, Indonesia -6.9%, Australia -7%, Japan -7.9%, US -9.1%, Brazil – 9.7%, Germany -9.7%, Turkey -11%, Canada -11.5%, New Zealand -12.2%, Italy -12.8%, Singapore -13.2%, France -13.8%, South Africa -16.4%, Malaysia -17.1%, Mexico -17.1%, Spain -18.5%, UK -20.4% and India -25.2%.
China has a large market with a population of 1.4 billion. With the coronavirus epidemic sweeping the world, China has become a “safe haven” for global capital.
Data from the Ministry of Commerce show that from January to August this year China’s inflow of foreign capital reached CNY619.78 billion, a year-on-year increase of 2.6%. And China’s actual use of foreign capital in August was CNY84.13 billion, up by 18.7%, a record high this year.
China’s bond market is growing and proving popular with foreign investors because of its comparatively high interest rates.
Statistics show that in the first eight months of this year, China’s export volume reached CNY11.05 trillion, an increase of 0.8% year-on-year, and the cumulative growth rate also turned from negative to positive.
The growth of China’s exports means it has increased its share of global exports and consolidated China’s position in the industrial supply chain.