Chinese stocks surge on Monday following news of 2.3% GDP growth data by NBS
Published: Jan 18, 2021 12:56 PM Updated: Jan 18, 2021 03:02 PM

Investors are seen at a stock trading hall in east China's Shanghai. File photo: Xinhua/Zhuang Yi

Chinese stock boards surged on Monday, bouncing back into the green from red territory following upbeat news of the Chinese economy's 2.3 percent growth in 2020, which made China the only major economy in the world to achieve positive growth in a year afflicted by the coronavirus outbreak. 

By the end of the close session, the Shanghai Composite Index rose by 0.84 percent to 3,596.22 points; the Shenzhen Component Index rose by 1.58 percent to 15,269.27 points, while the tech-heavy ChiNext board rose by 1.92 percent to 3,149.20 points. 

It marked a significant turnaround since all three boards were stuck in the red when stock trading started this morning. The Shanghai Composite Index edged down slightly by 0.32 percent at opening; the Shenzhen market edged down to 14980.50 points as well, while the tech-heavy ChiNext board lowered by 0.39 percent at the beginning of stock trading. Rare-earth stocks and viscose fiber shares led the rally.  

According to data freshly released by the National Bureau of Statistics on Monday, China's GDP grew 2.3 percent to 101.6 trillion yuan ($15.68 trillion) in 2020, meaning that it was the only major economy in the world to enter positive territory last year. Its Q4 GDP expanded 6.5 percent as well. 

The 2.3 percent growth rate translates into an economic output gain of around 2 trillion yuan ($309 billion) from 2019, the equivalent of Chile's GDP in 2019, which is the world's 43rd-largest economy.

Li Daxiao, chief economist at Shenzhen-based Yingda Securities, told the Global Times that the positive economic growth would help lift listed companies' business performance, which would in turn drive the stock market to higher levels. Specifically, it would be a bonus to blue-chip stocks, whose valuations are currently at a relatively low level. 

Dong Dengxin, director of the Financial Securities Institute at Wuhan University of Science and Technology, said that the GDP growth had been "generally in line with" market expectations, but mainland stock markets' performance this year would depend on external markets, particularly the US markets, which can be at risk of potentially nosediving. 

Global Times