* China GDP up 6.5% y/y in Q4, vs Q3’s 4.9%

* 2020 growth at 2.3%, lowest in more than four decades

* Recovery seen gaining further steam in 2021

* Leaders rule out policy u-turn amid pandemic (Adds details, context)

BEIJING, Jan 18 (Reuters) – China’s economy grew at a faster-than-expected pace in the fourth quarter of last year, ending a rough coronavirus-striken 2020 in remarkably good shape and remained solidly poised to expand further this year.

The gross domestic product (GDP) expanded 6.5%, data from the National Bureau of Statistics showed on Monday, faster than the 6.1% forecast by economists in a Reuters poll, and followed 4.9% growth in the third quarter.

GDP grew 2.3% in 2020, the data showed, making China the only major economy in the world to avoid a contraction last year as many nations struggled to contain the COVID-19 pandemic.

Aided by strict virus containment measures and policy stimulus, the economy has recovered steadily from a steep 6.8% slump in the first three months of 2020, when an outbreak of COVID-19 in the central city of Wuhan turned into a full-blown epidemic.

The world’s second-largest economy has been fuelled by a surprisingly resilient export sector, but consumption – a key driver of growth – has lagged expectations amid fears of a resurgence of COVID-19 cases.

Data on Thursday showed Chinese exports grew by more than expected in December, as coronavirus disruptions around the world fuelled demand for Chinese goods even as a stronger yuan made exports more expensive for overseas buyers.

Despite the steady recovery in quarterly growth, 2020 GDP growth was the weakest pace in more than four decades.

The slew of bright economic data has reduced the need for more monetary easing this year, leading the central bank to scale back some policy support, sources told Reuters, but there would be no abrupt shift in policy direction, according to top policymakers.

Source: reuters.com