China will end this year as the only major country in the world to see its economy grow rather than shrink.
Why it matters: China is operating from a position of great strength, with an economy expected to grow by 8.4% in 2021. If President-elect Joe Biden views China as a “serious competitor,” then the competition will be fiercer during his presidency than at any point in history.
What they’re saying: “However many times you hear the China growth story, it continues to have the capacity to shock and amaze,” says Columbia historian Adam Tooze. “In scale and speed it is unlike any previous experience.”
By the numbers: China’s economy is projected to grow by 2% in 2020 and by another 8.4% in 2021. By the end of next year, its economy is expected to be 10.6% larger than it it was at the beginning of this year.
- By contrast, after shrinking by 3.6% this year and growing by a projected 4% next year, the U.S. economy is going to end 2021 just 0.25% larger than it was at the beginning of 2020.
What happened: Wuhan, China, was the first area in the world to get locked down in an attempt to get the coronavirus under control. Today, its nightclubs are packed with revelers, none of whom feel the need to wear masks or social distance.
The big picture: China managed to become a post-COVID economy within months of the virus striking.
- A Lancet study found that China made full and effective use of its centralized epidemic response system, as well as fresh memories of the SARS pandemic and a low incidence of nursing homes.
- The lockdown, which lasted 76 days in Wuhan, was particularly strict, with only one member of each household permitted to leave home every couple of days for necessary supplies. It was also accompanied by an effective and efficient nationwide contact-tracing program.
Today, China’s factories are operating above capacity, Sinovation Ventures CEO Kai-Fu Lee tells Axios from Beijing. They’re making up for pandemic-related reductions in manufacturing capacity in the rest of the world, as well as for the period of time they were shut down earlier this year.
- It will take all of Biden’s charm and diplomatic savvy to be able to put together a coalition capable of constraining China — or even just nudging it in a more U.S.-friendly direction.