China’s GDP grew 18.3 percent in the first quarter of 2021 compared to the same period last year, official data showed on Friday.
The increase is the largest since China began keeping quarterly records in 1992.
As the virus has hit global markets, the world’s second-largest economy appears to be recovering from the coronavirus crisis, accelerated by industrial activity and better-than-expected exports.
While the disease first appeared in central China, the country was also the fastest to bring the pandemic under control after authorities imposed strict control measures.
Is the Chinese economy rebounding or growing?
However, the latest data is lower than expected, with a Reuters poll of economists forecasting growth of 19%.
The numbers could suggest a strong rebound rather than strong growth.
By comparison, the Chinese economy shrank 6.8% in the first quarter of 2020, due to lockdowns nationwide.
Given the weak starting point for the quarterly comparison, experts doubt that China can maintain the rapid pace of its expansion.
“The result is that with the economy already above its pre-virus trend and the withdrawal of political support, China’s post-COVID rebound is stabilizing,” said Julian Evans-Pritchard, Chinese economist. principal at Capital Economics.
Which sectors are responsible for the expansion?
China’s rebound was led by exports as factories rushed to fill overseas orders. Industrial production for March was up 14.1% from a year ago.
And retail sales rose 34.2% as shoppers returned to restaurants, malls and car dealerships.
“Promisingly, the monthly indicators suggest that industrial production, consumption and investment all accelerated in March on a sequential basis, after the weakness of the first two months,” said Lousi Kuijs, head of the Asian economy. at Oxford Economics.
Despite the strong numbers, analysts predict some sectors will slow down as the government’s fiscal and monetary stimulus are reduced.
Yue Su, of the Economist Intelligence Unit, said that although the latest figures show that China’s economic recovery is widespread, some production and export activity could have been “triggered” in the first quarter, suggesting a slowdown of future growth.
mna / rt (AFP, Reuters)