China’s economy grew in 2020, but only the rich are “revenge spending”

China today reported 2.3% growth in GDP last year, making it the first and probably only major country whose economy expanded in 2020.

But a marked decrease in consumer spending, contrasted against a resilient and robust luxury goods market, offers a glimpse into how uneven the country’s recovery has been.

Despite seeing its first GDP contraction in nearly 30 years in the first quarter of last year, China appeared to bounce back relatively quickly from the coronavirus pandemic. Thanks to Beijing’s draconian measures to contain the virus, its focus on reviving sectors like infrastructure, and strong overseas demand for Chinese goods, the country has had a V-shaped recovery since the middle of last year, and reported 6.5% GDP growth in the fourth quarter. Although China’s GDP growth in 2020 is the slowest the country has had in over 40 years, it still beat analyst expectations of 2.1%.

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