The story of China’s economic recovery in Q4 2020 was “more of the same”: a faster rebound in output and industrial production than final demand and household consumption (within China itself). Strong trade surpluses and export-oriented manufacturing powered economic growth late in 2020, but the economy will face headwinds in 2021 from regulations targeting the property sector, a weaker fiscal impulse, and slower credit growth. Virus-related restrictions on Chinese New Year travel may distort Q1 2021 data, potentially hurting consumption but boosting industrial output.
