<p>China's economy is expected to grow at its weakest pace in over four decades even as it steadily recovers from a coronavirus-induced dive earlier this year, but overall output could rebound sharply in 2021, a Reuters poll showed.</p>.<p>The world's second-biggest economy is now expected to expand by 2.1% in 2020, according to the median of 37 analysts surveyed by Reuters, down slightly from the 2.2% growth projected in the last poll in July.</p>.<p>That would make China the only major economy to grow in 2020, albeit at the slowest annual pace since 1976, the final year of Mao Zedong's Cultural Revolution.</p>.<p>China's economic recovery accelerated in the third quarter as consumers shook off their coronavirus caution, although the weaker-than-expected headline growth highlighted some persistent risks including from resurgent Covid-19 cases globally and ongoing tensions with the United States over a range of issues.</p>.<p>The poll forecast fourth-quarter GDP to rise 5.8% year-on-year, quickening from 4.9% in July-September.</p>.<p>Growth is projected to pick up to 8.4% in 2021, as the global economy is set to recover from the health crisis, according to the poll.</p>.<p>"With exports strong and domestic consumption and investment both improving, Q4 could be one of the best quarters for overall growth in a few years," analysts at research firm Gavekal Dragonomics said in a note.</p>.<p>"Growth momentum should peak in the first half of 2021, though base effects will confuse the data readings."</p>.<p>The economy has been recovering steadily from a steep 6.8% slump in the first quarter, when it was jolted by the pandemic.</p>.<p>But China faces long-term obstacles to maintain its ascent, analysts say. Its top leaders are holding a key meeting to chart the country's economic course for 2021-2025, amid rising tensions with the United States on trade, technology and other fronts, threatening a decoupling of the world's two largest economies.</p>.<p><strong>BALANCING ACT</strong></p>.<p>China will strike a balance between stabilising economic growth and preventing risks, even as debt was allowed to temporarily rise this year to support the coronavirus-hit economy, central bank chief Yi Gang said last week.</p>.<p>The government has rolled out a raft of measures including more fiscal spending, tax relief and cuts in lending rates and banks' reserve requirements to revive growth and support employment.</p>.<p>While the central bank stepped up policy support after widespread travel restrictions choked economic activity, it has more recently held off on further easing.</p>.<p>Analysts expect China will keep its one-year loan prime rate (LPR) steady at 3.85% until the end of 2021. The central bank kept the LPR unchanged for the sixth straight month at its October fixing, after cutting it by a total of 46 bps since last August.</p>.<p>The poll also predicted no change to the benchmark deposit rate until the end of 2021. The PBOC has kept it untouched at 1.5% since October 2015.</p>.<p>China's consumer price index (CPI) in 2020 will likely rise 2.7% from the previous year, slowing from a 2.9% rise in 2019, according to the poll.</p>.<p>CPI is expected to rise 2.1% in 2021, according to the poll.</p>
<p>China's economy is expected to grow at its weakest pace in over four decades even as it steadily recovers from a coronavirus-induced dive earlier this year, but overall output could rebound sharply in 2021, a Reuters poll showed.</p>.<p>The world's second-biggest economy is now expected to expand by 2.1% in 2020, according to the median of 37 analysts surveyed by Reuters, down slightly from the 2.2% growth projected in the last poll in July.</p>.<p>That would make China the only major economy to grow in 2020, albeit at the slowest annual pace since 1976, the final year of Mao Zedong's Cultural Revolution.</p>.<p>China's economic recovery accelerated in the third quarter as consumers shook off their coronavirus caution, although the weaker-than-expected headline growth highlighted some persistent risks including from resurgent Covid-19 cases globally and ongoing tensions with the United States over a range of issues.</p>.<p>The poll forecast fourth-quarter GDP to rise 5.8% year-on-year, quickening from 4.9% in July-September.</p>.<p>Growth is projected to pick up to 8.4% in 2021, as the global economy is set to recover from the health crisis, according to the poll.</p>.<p>"With exports strong and domestic consumption and investment both improving, Q4 could be one of the best quarters for overall growth in a few years," analysts at research firm Gavekal Dragonomics said in a note.</p>.<p>"Growth momentum should peak in the first half of 2021, though base effects will confuse the data readings."</p>.<p>The economy has been recovering steadily from a steep 6.8% slump in the first quarter, when it was jolted by the pandemic.</p>.<p>But China faces long-term obstacles to maintain its ascent, analysts say. Its top leaders are holding a key meeting to chart the country's economic course for 2021-2025, amid rising tensions with the United States on trade, technology and other fronts, threatening a decoupling of the world's two largest economies.</p>.<p><strong>BALANCING ACT</strong></p>.<p>China will strike a balance between stabilising economic growth and preventing risks, even as debt was allowed to temporarily rise this year to support the coronavirus-hit economy, central bank chief Yi Gang said last week.</p>.<p>The government has rolled out a raft of measures including more fiscal spending, tax relief and cuts in lending rates and banks' reserve requirements to revive growth and support employment.</p>.<p>While the central bank stepped up policy support after widespread travel restrictions choked economic activity, it has more recently held off on further easing.</p>.<p>Analysts expect China will keep its one-year loan prime rate (LPR) steady at 3.85% until the end of 2021. The central bank kept the LPR unchanged for the sixth straight month at its October fixing, after cutting it by a total of 46 bps since last August.</p>.<p>The poll also predicted no change to the benchmark deposit rate until the end of 2021. The PBOC has kept it untouched at 1.5% since October 2015.</p>.<p>China's consumer price index (CPI) in 2020 will likely rise 2.7% from the previous year, slowing from a 2.9% rise in 2019, according to the poll.</p>.<p>CPI is expected to rise 2.1% in 2021, according to the poll.</p>