China growth outlook still challenging, 2021 GDP growth projected at 8%

Commerzbank economist sees a further normalisation of its monetary policy, where credit risks could emerge

Angela Tan

Published Wed, Feb 24, 2021 · 05:50 AM

Singapore

CHINA'S growth outlook remains challenging due to the Covid-19 pandemic and global demand headwinds, but the economy is expected to grow 8 per cent this year compared to 2.3 per cent last year, before moderating to grow at 5 per cent in 2022, said Commerzbank, one of Germany's biggest banks.

In contrast, the United States is seen growing 4 to 5 per cent this year and next.

Commerzbank's Emerging Market senior economist, Hao Zhou, sees a further normalisation of China's monetary policy, during which credit risks could emerge, and a continued focus on the US's China policies, although policies under the Biden administration are expected to be "more predictable".

Speaking over a Zoom call on Tuesday, he said China's economy started the year on a relatively softer tone due to lockdown measures to contain the spread of the virus. Thus, the service sector was hit harder than the manufacturing sector. On the other hand, trade flows have been relatively strong, with China leading the export recovery f…