According to World Bank’s Global Economic Prospects reports released in June 2021, China is leading the globe’s economic recovery with a forecasted 8.5% GDP growth in the year (“China Economic Update,” 2021). The Chinese economic growth has been attributed to an increase in consumer demand where the record sales during the 2021’s 618 mid-year shopping festival introduced by the country’s main e-commerce platforms experienced a robust consumer demand. At the beginning of the year, the economy of China slowed down than was least expected, demonstrating more signs that the process of global recovery was under immense pressure since the Delta virus variant undermined customer confidence and snarled up supply chains (McKibbin & Fernando, 2021). General sales in the retail sector were hit by new restrictions introduced amid the virus’ existence to contain additional outbreaks (“China Economic Update,” 2021). If the economic growth of China had continued to lose steam amid the coronavirus resurgence, other parts of the globe were going to experience additional headwinds in economic growth. The slowdown of the Chinese economy also illustrated a weaker demand for global economies as oil prices also continued to sink.
At the moment, the economy of China is revealing more signs of a speedy economic recovery with various global growth opportunities in 2021. The economy of this country has posted strong growth in 2021 since July (“China: Economic Activity Continues,” 2021). The World Bank reported that if the current suppression of Covid-19 is continued, the Chinese economic growth is expected to reach 8.5% by the end of the year (McKibbin & Fernando, 2021). As the economy of the country becomes more entrenched, the structure of gross demand is projected to continue rotating and shifting towards private domestic demand. The real consumption is expected to return to a trend in the pre-Covid-19 period, which will primarily be supported by a recovery in the ongoing labor market, improved customer confidence, and the rising cost of household incomes (“China: Economic Activity Continues,” 2021). Moreover, investments will also be a recipe for additional global growth opportunities since they are regarded as one of the main engines for an economy’s growth (McKibbin & Fernando, 2021). However, the structure of Chinese investment structures is expected to shift towards private investments since the manufacturing Capex will pick up, thus offsetting property investments and cooling infrastructure.
Most importantly, shifts in various manufacturing supply chains are being experienced, which is significantly promoting the growth of the Chinese economy and presenting related opportunities for future growth (Herrala & Orlandi, 2021). For instance, German car manufacturers OEM increased their auto-production in the Chinese economy; Japanese Electronics Company expanded its production in China to meet the local demand for 5G infrastructure, while the Korean white goods maker moved production of refrigerators for the US from China back to South Korea (Herrala & Orlandi, 2021). The shifts in various manufacturing supply chains have continued to bring significant gains to the global growth of the Chinese economy in 2021. For example, one in three German vehicles is made in China, which is the globe’s largest market of German cars which has continued to develop into a lifeline for manufacturers, especially during the Covid-19 pandemic (McKibbin & Fernando, 2021). China will continue to be the biggest automotive and locomotive industry as it was after the financial crisis since many countries as willing to work with the Chinese.
References
China Economic Update. (June 2021). The World Bank Group. Retrieved
China: Economic Activity Continues to Normalize though Some Risks Remain – World Bank Report. (June 2021).
Herrala, R., & Orlandi, F. (2021). Win-Win? Assessing the global impact of the Chinese economy. Asia and the Global Economy, 1(1), 100006.
McKibbin, W., & Fernando, R. (2021). The global macroeconomic impacts of COVID-19: Seven scenarios. Asian Economic Papers, 20(2), 1-30.
