Chinese economy jumped 18.3% in the first quarter of 2021

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Top line

China’s economy grew 18.3% in the first quarter of 2021, according to data released by the country’s National Bureau of Statistics on Friday, the highest quarterly growth figure since China began keeping records in 1992 and an indication that China’s vigorous recovery is continuing.

Highlights

China’s growth in the last quarter, driven by a strong rebound in the retail sector and strong growth in industrial production, was significantly higher than its 6.5% year-on-year growth in the past three months from 2020.

This quarterly growth figure of 18.3% is partly attributable to the massive collapse in the first quarter of 2020, when China was stranded and the economy contracted by 6.8%.

It is also slightly below expectations: Analysts polled by Reuters were forecasting growth of 19%.

The economy grew 10.3% in the first quarter of this year compared to the first quarter of 2019, when economic conditions were more normal.

Surprising fact

China was the only major economy that saw growth in 2020. Its economy grew 2.3% during the year – despite huge losses in the first quarter – in part thanks to a tight national lockdown that helped to curb the spread of the virus early in. The US economy contracted 3.5% in 2020 and fell at an annual rate of 5% in the first quarter of the same year.

Contra

HSBC analysts in Hong Kong expect China’s year-over-year growth in the first three months of 2021 to actually be 5.4% after removing statistical distortions caused by the crisis of the beginning of last year, according to the the Wall Street newspaper. This is below the Chinese government‘s target of over 6.0%.

Large number

7.8%. This is how much the Organization for Economic Co-operation and Development expects China to grow in the year 2021, according to its most recent economic outlook. He expects the US economy to grow 6.5%.

Crucial quote

“The national economy is off to a good start,” the National Bureau of Statistics said in its statement, but it also recognized the continuing risk posed by the coronavirus pandemic. “We must be aware that the COVID-19 epidemic continues to spread globally and that the international landscape is complicated with great uncertainties and instabilities,” he said.

Further reading

China’s economy soared in early 2021 as Beijing seeks to end its incentives (Forbes)

China overtakes US as No.1 destination for foreign investment as coronavirus disrupts global economy (Forbes)

Message from China to the United States: We are equal now (The Wall Street Journal)

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