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The Nikkei View

China's economy is not out of the woods yet

Positive growth belies unresolved structural challenges

A view of Beijing on Jan.15: China's economy has not escaped the impact of the coronavirus.      © Reuters

China's real economic growth rate in 2020 was 2.3%. That is the lowest since 1976 -- 44 years ago -- when the country was in the throes of the Cultural Revolution. Although growth in the October-December period of 2020 registered a healthy 6.5%, the new coronavirus remains a potential threat both within China and abroad.

In the second half of last year, China's economy was driven by investment, mainly by state-owned enterprises, and growing exports of medical and hygiene products and personal computers. Demand for these products has expanded as the pandemic spreads and more people work from home. This helped China achieve positive growth in 2020, making it the only major economy to do so.

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