China’s GDP soars by a record 18.3% in Q1

BEIJING: China’s economy grew by a record 18.3% in the first quarter of 2021, propelled by demand at home and abroad and the government fiscal support after a deep Covid-19 pandemic-induced slump last year.

It was the biggest jump in gross domestic product (GDP) since China started keeping quarterly records in 1992.

The GDP reached 24.93 trillion yuan ($3.82 trillion) in Q1, up 0.6% from the fourth quarter of last year, data from China’s National Bureau of Statistics (NBS) showed on Friday.

The Chinese economy had registered a 6.8% contraction in Q1 2020 due to the impact of lockdowns following the outbreak of the coronavirus, which first emerged in the Chinese city of Wuhan.

Aided by stringent virus containment and tracking measures and financial emergency relief for businesses, the economy has since slowly recovered – a rebound, firstly, led by overseas demand, and then by local consumption as shops, restaurants and markets across China opened up.

The jump in GDP undershot the 19% forecast by economists in a Reuters poll, however, it was the fastest since 1992, and up from 6.5% in the fourth quarter last year.

“Thanks to the effective measures that the government has taken to control the pandemic and stimulate the economy, we have observed resilient momentum in economic indicators coming from both the production and consumption side,” Hoffman Cheong, EY China

THE CHINESE GDP REACHED 24.93 TRILLION YUAN ($3.82 TRILLION) IN Q1, UP 0.6%

FROM THE FOURTH QUARTER OF

LAST YEAR

North managing partner, told the news agency Xinhua.

In particular, catering sales had almost returned to the level at the beginning of 2019, suggesting strong sentiment of the populace to go out, meet people and spend money, said Cheong.

“This is the underlying reason why we are confident in China’s outlook,” Cheong said.

“Millions of Chinese stayed at their working cities during the spring festival holidays, coupled with the resurgence of sporadic coronavirus cases, which curbed consumption to some extent in the first two months. With the roll-out of vaccination plans across the country, there is a turnaround in March,” Lian Ping, head of Zhixin Investment Research Institute, told the tabloid Global Times.

Despite the economic rebound, the NBS warned of “high uncertainties and instabilities” as coronavirus continues to spread globally and the foundation for the domestic economic recovery is yet to solidify.

“The long-standing structural problems remain prominent with new situations and issues arising from development,” the NBS said.

China’s GDP grew just 2.3% rise last year, its weakest expansion in 44 years, but still making it the only major economy to avoid contraction as other industrial powers struggled with the pandemic hit.

The International Monetary Fund (IMF) projected that the Chinese economy will grow by 8.4% in 2021, 0.3% points above the January forecast, according to its World Economic Outlook released in early April.

REUTERS The Chinese economy had registered a 6.8% contraction in Q1 2020 due to the impact of lockdowns.