China Roars Back

An Economic Recovery Spurs a Post-Pandemic Project Revival

theEdge

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IMAGES COURTESY OF, FROM LEFT, UNIVERSAL STUDIOS, BEIJING 2022 AND ZAHA HADID ARCHITECTS

China’s rebound is real—and it’s accelerating a burst of project activity.

With the rest of the world mired in a pandemic-induced recession, China’s GDP rose 2.3 percent last year—the only major world economy to end the year in the black, according to Beijing’s National Bureau of Statistics.

The bounce back is particularly remarkable given that China’s economy shrank 6.8 percent in the first quarter of 2020—the country’s first contraction since quarterly GDP statistics began to be officially tracked in 1992—as the virus emerged and travel and business ground to a halt. Since then, however, China’s economy has experienced a V-shaped recovery, finishing the year with 6.5 percent growth in the fourth quarter.

China is ahead of the global pack because of a swift, strong response to COVID-19, says Stephen Chan, a professor of world politics at SOAS University of London. “Even with greater individual economic freedoms, the state and party have a commanding role, so dissent against lockdowns was impossible,” he says. When it comes to social distancing, “the matter of discipline—whether enforced or not—becomes paramount.”

Head Start

After ending a strict lockdown and proclaiming victory over the virus in May 2020, China saw its domestic tourism, retail spending and exports increase as schools, offices and businesses reopened. The government is also taking on more debt to fund a feast of infrastructure projects, employing millions of people to work on the initiatives as well as manufacture the necessary project materials.

According to The New York Times, 37 Chinese cities had initiatives underway in 2020 to build a total of 150 new subway lines. The country’s sprawling high-speed rail system is expanding so fast that project leaders buy three times as many pile drivers annually as the European and U.S. markets combined. Beijing is also investing heavily to build new roads and sewage systems across the country, employing millions of people along the way. Teams will also manufacture the equipment necessary to complete these projects.

Infrastructure isn’t the only sector that’s surging, though. Consumer spending recovered, surpassing the previous year’s levels in the third quarter, spurred by a 14.8 percent spike in online sales as millions of families shifted to buying groceries and clothing on the internet. Alibaba’s Singles Day, in particular, sparked a large economic boost, generating US$74.1 billion in gross merchandise volume. The project team added three additional days to last year’s shopping frenzy—adapting the strategy that U.S. teams apply to Black Friday sales—to generate a colossal uptick in sales: The record-breaking event generated a 26 percent increase in revenue from the event a year prior.

Meanwhile, exports rose 3.6 percent last year despite the trade war with the United States, as Chinese exporters grabbed market share from other competitors still stifled by virus restrictions. Medical device exports soared 46 percent in the first six months of 2020, textile exports—including face masks—jumped 30 percent, and notebook computer exports grew 9.1 percent in the same period, reflecting a global shift to working from home and remote schooling.

Beijing Uninterrupted

China’s capital city illustrates how the country has pushed through the pandemic to maintain its ambitious project activity.

◄ PARKS AND RECREATION

A massive collaboration helped keep Universal Beijing Resort on pace to open in May. Construction was completed last year, with over 100,000 construction workers, 500 designers and artists, and more than 500 suppliers and international partners. Made up of Universal Studios Beijing, Universal CityWalk Beijing, the Universal Studios Grand Hotel and the NUO Resort Hotel, the resort is projected to attract more than 10 million annual visitors.

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GOING FOR GOLD—AND BEYOND

Keeping all projects for the 2022 Winter Olympics in Beijing on schedule has been a challenge. In January teams completed expansion of the National Speed Skating Oval, the National Aquatics Center and the National Indoor Stadium. Work on the 2022 Winter Olympic Village is expected to be completed by June—with a focus on long-term benefits. The complex is scheduled to include 2,300 beds for athletes and officials. After the Olympics, the village will become public housing.

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SPOTLIGHT ON SUSTAINABLE

Phase II of the International Exhibition Center in Beijing began taking shape in February when U.K. firm Zaha Hadid Architects was chosen to design a 438,500-square-meter (4.7 million-square-foot) space that’s nearly the size of Vatican City. The team will rely on modular construction to reduce time and operational costs. But the real impact is sustainability: Solar arrays will generate renewable energy, new tech will facilitate rainwater collection and gray water recycling, and roofing will provide both insulation and sound absorption.

“Chinese manufacturers remained very competitive in terms of pricing and, as economies round the world floundered, Chinese goods—no matter what the official governmental rhetoric was— remained attractive,” says Chan.

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—Stephen Chan, SOAS University of London

Keep Growing

China’s growth in 2020 means its economy will account for 16.8 percent of global GDP, according to Moody’s Analytics—up from 14.2 percent in 2016. The United States is expected to account for 22.2 percent, virtually unchanged from 22.3 percent in 2016. Still, as new virus strains percolate, China must account for the possibility of additional restrictions that could stifle the economy.

“Whereas Beijing seems to want to get back to production as normal, regional party bases tend to be more risk averse,” as they’re fearful of being held accountable for rising infection rates, says Austin Williams, a senior lecturer in architecture at Kingston School of Art and author of two recent books about China’s urban growth.

Concerns about worsening relations with the United States were part of the reason the International Monetary Fund trimmed its Chinese economic growth projection for 2021—a downgrade that underscores the country’s geopolitical risks and ongoing global economic challenges. Chan says a long list of issues could tip the scales, including China’s naval activities and land claims in the South China Sea, its global vaccine diplomacy, continued financial support for North Korea and trade wars— not to mention national unrest among Muslim populations and Hong Kong students.

“The question is whether China’s flexing of muscle internationally will overstretch even a well-organized and disciplined apparatus,” says Chan.

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