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Illustration: Eniola Odetunde/Axios

China will end this year as the only major country in the world to see its economy grow rather than shrink.

Why it matters: China is operating from a position of great strength, with an economy expected to grow by 8.4% in 2021. If President-elect Joe Biden views China as a "serious competitor," then the competition will be fiercer during his presidency than at any point in history.

Source: World Bank, FactSet; Chart: Axios Visuals

What they're saying: "However many times you hear the China growth story, it continues to have the capacity to shock and amaze," says Columbia historian Adam Tooze. "In scale and speed it is unlike any previous experience."

By the numbers: China's economy is projected to grow by 2% in 2020 and by another 8.4% in 2021. By the end of next year, its economy is expected to be 10.6% larger than it it was at the beginning of this year.

  • By contrast, after shrinking by 3.6% this year and growing by a projected 4% next year, the U.S. economy is going to end 2021 just 0.25% larger than it was at the beginning of 2020.

What happened: Wuhan, China, was the first area in the world to get locked down in an attempt to get the coronavirus under control. Today, its nightclubs are packed with revelers, none of whom feel the need to wear masks or social distance.

The big picture: China managed to become a post-COVID economy within months of the virus striking.

  • A Lancet study found that China made full and effective use of its centralized epidemic response system, as well as fresh memories of the SARS pandemic and a low incidence of nursing homes.
  • The lockdown, which lasted 76 days in Wuhan, was particularly strict, with only one member of each household permitted to leave home every couple of days for necessary supplies. It was also accompanied by an effective and efficient nationwide contact-tracing program.

Today, China's factories are operating above capacity, Sinovation Ventures CEO Kai-Fu Lee tells Axios from Beijing. They're making up for pandemic-related reductions in manufacturing capacity in the rest of the world, as well as for the period of time they were shut down earlier this year.

The bottom line: China has never been stronger. It now anchors RCEP, the world's largest free-trade area, while buying influence in the rest of the world through its Belt and Road Initiative.

  • It will take all of Biden's charm and diplomatic savvy to be able to put together a coalition capable of constraining China — or even just nudging it in a more U.S.-friendly direction.

Go deeper

Dion Rabouin, author of Markets
Jan 29, 2021 - Economy & Business

The state of the U.S. economy after one year of the coronavirus

Source: St. Louis Fed; Billions of chained 2012 dollars; Chart: Axios Visuals

The U.S. economy shrank by 3.5% last year, the Commerce Department reported, with the country seeing both its largest quarterly GDP decline and its largest quarterly GDP increase in the second and third quarters, respectively.

Where it stands: The 3.5% decline is the worst year for the U.S. since at least the end of World War II, and the economy is more than $473 billion smaller than it was before the pandemic hit.

Corporate America finds downside to politics

Illustration: Annelise Capossela/Axios

Corporate America is finding it can get messy when it steps into politics.

Why it matters: Urged on by shareholders, employees and its own company creeds, Big Business is taking increasing stands on controversial political issues during recent months — and now it's beginning to see the fallout.

Church groups say they can help the government more at border

A mural inside of Casa del Refugiado in El Paso, Texas. Photo: Stef Kight/Axios

Despite the separation between church and state, the federal government depends upon religious shelters to help it cope with migration at the U.S.-Mexico border.

Why it matters: The network supports the U.S. in times of crisis, but now some shelter leaders are complaining about expelling families to Mexico when they have capacity — and feel a higher calling — to accommodate them.