IN FOCUS
By Avishka Ashok

China’s GDP growth in 2021: Four contributing factors

On 17 January, the National Bureau of Statistics (NBS) reported that the Chinese economy had recorded an 8.1 percent growth in its GDP in 2021. The GDP accounted for 114.37 trillion yuan and fared better than the national expectations and the GDP of other developed economies. Chinese economists believe that the country managed to secure its economic growth despite drawbacks including the pandemic, energy crunch and other global challenges, and achieved more than the government’s expectation of 6 percent.

What does the NBS report say?
According to the NBS report, China’s per capita disposable income rose by 9.1 percent in 2021 and stood at 35,128 yuan in 2021. The fixed-asset investment also increased by 4.9 percent and amounted to 54.45 trillion yuan. China’s industrial capacity utilization rate also increased by 3 percent at 77.5 percent. The biggest contribution to the Chinese GDP has come from the following three industries: manufacturing, mining and energy.

The following four factors, could be identified based on the above report, that seemed to have contributed to China’s GDP growth in 2021.
1. Increased industrial output
The NBS report also showed that the industrial output had risen to 9.6 percent. The report revealed that the output produced by state-owned companies rose to eight percent while that of joint-stock companies rose to 9.8 percent. The fastest contributor to the output productivity was the energy sector at 11.4 percent. The output was ameliorated by the production and supply of electricity, heat, gas and water. The output by the manufacturing sector received an increase of 9.8 percent while the mining sector enjoyed an increased output of 5.3 percent.

2. Manufacturing and trade
In 2021, China became the top trade partner for numerous countries. It continued to retain its role as the world’s leading shipbuilder by acquiring 53.8 percent of the new orders globally. The Chinese made 5G phone also dominated the cellphone market with a surge in its sales by 63.5 percent.

3. Consumption growth
The retail sales of consumer growth also rose by 12.5 percent in 2021 and amounted for 44.08 trillion yuan. The head of the bureau revealed that the Chinese economy achieved major feats by recording a consumption retail score of 44 trillion yuan. The growth in consumption is also a result of lower unemployment rates in the urban and rural areas. According to the data released by the NBS, 12.69 million urban jobs were created in 2021, thereby lowering the urban unemployment rate by 0.5 percent. The data collected by the authorities revealed that the rate of unemployment in the largest age group (25-59) stood at 4.4 percent.

4. Energy growth
The National Energy Administration revealed that the total power used by the country in 2021 accounted for 8.31 trillion kilowatt-hours. The figure depicted a 14.7 percent growth in power usage in China. In order to keep up with the growing demands, China’s power generation also rose by 11 percent. Despite the drop in energy production in the fourth quarter, the overall production was higher than that of 2019. Thermal and hydropower witnessed a drop in its production whereas wind, solar nuclear power increased by 30.1 percent, 18.8 percent and 5.7 percent respectively.

References:
“China's GDP expands 8.1 pct in 2021,” Xinhua Net, 17 January 2022
“China's resident nominal disposable income up 9.1 pct in 2021,” Xinhua Net, 17 January 2022
“China's fixed-asset investment up 4.9 pct in 2021,” Xinhua Net, 17 January 2022
“China's industrial capacity utilization rate at 77.5 pct in 2021,” Xinhua Net, 17 January 2022
“China's industrial output up 9.6 pct in 2021,” Xinhua Net, 17 January 2022
“China's retail sales top 44 trln yuan in 2021,” Xinhua Net, 17 January 2022
“China remains world's leading shipbuilder in 2021,” Xinhua Net, 22 January 2022
“China's 5G phone shipments surge in 2021,” Xinhua Net, 22 January 2022
“China's surveyed urban unemployment rate drops in 2021,” Xinhua Net, 17 January 2022
“China's power generation up in 2021,” Xinhua Net, 17 January 2022
“China's power use surges 10.3 pct in 2021,” Xinhua Net, 18 January 2022

IN BRIEF
By Dincy Adlakha and Keerthana Nambiar

INTERNAL
Xi emphasizes urgent necessity to achieve China’s climate targets
On 25 January, President Xi Jinping addressed a Politburo study meeting in which he emphasized China’s urgent need to achieve the carbon goals. He stressed that the country must opt for low-carbon development that leads to a greener path. He said: “Achieving the ‘double carbon’ target is not something we are told to do but something that we must do.” He emphasized that China needs to switch to greener initiatives for a sustainable growth. (Echo Xie, “‘We must do it’: Xi Jinping stresses urgent need to meet China’s climate goals,” South China Morning Post, 26 January 2022)

Employment prospects drop for college graduates
On 25 January, Korea Times published a report that employment prospects for college graduates have dropped for the second consecutive quarter of 2021. The number of jobs available per applicant for fresh university graduates fell 0.79 in second quarter of 2020. This was down from 1.52 of the previous year. In the last quarter of 2021, the number fell to 0.88. The data was presented by China Institute for Employment Research at Renmin University of China. The report also mentioned that according tot he National Bureau of Statistics, the unemployment rate in urban areas od China in 2021 was 5.1 percent of which the rate for people aged 16 to 24 was 14.3 percent. (“Record number of Chinese graduates faced with grim employment prospects,” The Korea Times, 25 January 2022)

TECHNOLOGY
China Telecom opens 5G SMS for commercial market
On 25 January, China Telecom, the country’s giant mobile operator, officially announced that its 5G SMS is open for commercial use. This means that individuals can receive 5G messages for free but will be charged for sending them. Public can use this service not merely for messages but also for pictures, audio, video, purchasing tickets, checking train logistics and paying the dues. Users can do all this without installing other applications. The firm has set up 5G messaging platform with a support system to ensure security. The announcement is a good news for Chinese industries as it can strengthen technological integration. (“China Telecom officially announces 5G SMS for commercial use,” Global Times, 25 January 2022)

China develops mRNA COVID-19 vaccine, passes early stage human trials
On 25 January, a study published in Lancet Microbe journal revealed that a mRNA COVID-19 vaccine developed by China is safe and effective in its early-stage human trials. The vaccine was developed by the Academy of Military Medical Sciences, Suzhou Abogen Biosciences and Walvax Biotechnology. The vaccine has been tested on 120 individuals at a hospital in Hangzhou. The study revealed: “15 microgram doses induced the highest titers of neutralising antibodies, roughly double the antibody titers of convalescent patients with COVID-19, indicating stronger immune responses induced by the vaccine.” (“Trials show China's mRNA COVID-19 vaccine safe, effective, Xinhua Net, 26 January 2022)

REGIONAL
Electronic warfare aircraft spotted near Taiwan for the first time
On 25 January, Global Times reported that an electronic warfare aircraft of the People’s Liberation Army was spotted near Taiwan after two US aircraft carriers passed by the island recently. The J-16D aircrafts are capable of seizing the electromagnetic field and are currently being tested for its future use. This is the first time that an aircraft of such a kind has been used in the incursions near Taiwan. (“PLA's J-16D electronic warfare aircraft spotted for 1st time near Taiwan,” Global Times, 25 January 2022)

INTERNATIONAL
US House of Representatives finalises bill to counter China and strengthen Taiwan, Quad ties
On 26 January, South China Morning Post published an article that reported on a recent bill finalised by the US House of Representatives that was publicised on the previous day. The America Competes Act of 2022 is a 3000 pages long bill which will boost US competition with China. The act has provisions to strengthen US ties with Quad and Taiwan, including changing the name of Taipei de facto embassy in Washington and rectifying more semiconductor deals with Taiwan. The bill also allocates 100 million USD to counter the censorship and disinformation of the Chinese government. Further, the bill provides for creation of a new US special envoy post at the US State Department to engage a response to China’s policies in Xinjiang. (Jacob Fromer and Owen Churchill, “US House finalises bill to confront China, including provisions on semiconductors and Taiwan ties,” South China Morning Post, 26 January 2022)

President Xi extends support to Central Asian countries 
On 25 January, Chinese President Xi Jinping attended the virtual summit with the Central Asian countries and celebrated the 30 year anniversary of diplomatic ties. He announced that China would work with Central Asian countries to build a closer community and work towards a future with shared opportunities. President Xi aims to achieve these goals by increasing cooperation between China and the Central Asian countries through the Belt and Road Initiative. He also extended his support to fight against the three evils and said: “We have combined efforts to fight the three forces of terrorism, separatism and extremism, transnational organized crime and drug trafficking, and to resolutely reject external interference or attempts to instigate color revolutions.” (“ China to aid 5 Central Asia countries with additional 50 million vaccines, to continue 'high-level political mutual trust',” Global Times, 26 January 2022)

Russia and China hold joint anti-piracy drill 
On 25 January, the Chinese Defense Ministry announced that the Chinese and Russian Naval forces participated in joint anti-piracy drills in the Arabian Sea. The exercise was aimed at ameliorating the countries capabilities in the sea. The statement by the ministry said: “During the drills, the Chinese-Russian flotilla practiced training courses including joint maneuver, saving hijacked vessels and transporting injured personnel with helicopters in a mock joint anti-piracy operation.” (“China, Russia hold joint anti-piracy drills in Arabian Sea,” Global Times, 25 January 2022)