In the fourth quarter of 2021, China recorded GDP growth of 4% per annum (from + 4.9% per annum in the third quarter), while in 2021 the GDP increased by 8.1 per cent, the largest from 2011. This was reported by the National Statistics Office, according to which the increase on a cyclical basis is 1.6%, better than 0.2% in the previous three months. According to the Statistical Office, however, despite the growth recorded in 2021, the Chinese economy is “facing a triple pressure deriving from the contraction in demand, the supply shock and expectations on the economic situation of the coming months which are weaker than expected”.
Also in 2021, China’s industrial production increased by 9.6% compared to the previous year. This was announced by the National Statistics Office. In the month of December alone, industrial production grew by 4.3% compared to the previous year, and by 0.42% compared to November. In addition, in December, retail sales recorded a disappointing 1.7% increase on a trend basis. In 2021, sales increased by 12.5 percent.
Central bank cuts medium-term rates
The Central Bank of China has cut the financing costs of its medium-term loans for the first time since April 2020. In a statement, the People’s Bank of China announced that it has reduced the 1-year interest rate on medium-term loans (Mlf ) to some financial institutions by 10 basis points to 2.85%, up from 2.95% in previous transactions.
Birth rate at historic lows
Another structural problem of the Chinese economy is the demographic one. The birth rate plummeted to historic lows in 2021, reaching the ratio of 7.52 births per 1,000 people, down from 8.52 in 2020. According to data from the National Statistics Office, this is the figure lowest ever recorded in the country’s statistical yearbook since 1978 and also the lowest since the founding of the People’s Republic of China in 1949. Last year the country recorded a total of 10.62 million births.