Outlook 2021
China’s growing momentum
18 December 2020
Expect the economic momentum built by China in the latter part of an extraordinary 2020 to continue into the New Year.
Like much of the world, China has gone through a very challenging 2020, with the outbreak of the COVID-19 pandemic hurting output in the early parts of the year. The country recorded a decline in growth of 6.8 per cent in the first quarter.
But since then, momentum has grown, particularly in the second half. Now, ANZ Research expects the country to record positive growth in 2020, and for that to expand in 2021.
ANZ Research’s current forecast is for China’s 2020 gross domestic product to grow around 8 per cent to 9 per cent. Given the decline in 2020, first-quarter growth is likely to be recorded in double figures.
So the outlook is a positive one, although China will continue to navigate through difficult external and domestic conditions.
How the relationship between China and US will develop after a change of leadership in America will remain the biggest question for the market through 2021. So far, we have not heard a lot about how the incoming Biden administration is going to deal with China.
We know China will continue to commit to phase-one deals and some other commitments secured with the outgoing Trump administration. But the uncertainty around that relationship is likely to be a factor that will drive financial market volatility in the New Year.
Outlook 2021
After an unprecedented 2020, the outlook for 2021 is a difficult one to pin down. The post-COVID landscape is one of rapid technological change, a transformational shakeup of global trading orthodoxy, and an increasing focus on sustainable business practices.
At ANZ Institutional, we aim to help our customers put themselves in the best possible position to take advantage of these forces. Our subject-matter experts have the insight to offer market-leading thought leadership in a range of complex areas from across more than 30 global markets.
As 2021 looms, we are asking our experts about the key factors they see shaping markets and industry in 2021 – and the opportunities and challenges within. We’ll be sharing the responses with you over the coming weeks.
Raymond Yeung is Chief Economist, Greater China at ANZ
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