China reports record growth in the first quarter

On Friday, China announced a record increase in its economic growth in the first quarter (+ 18.3% in one year), largely due to a low basis for comparison with the early 2020s when activity was paralyzed by the epidemic.

This sharp acceleration in China’s GDP was widely expected, and a group of analysts surveyed by AFP predicted a further increase (18.7%).

This is the fastest growth rate since China’s quarterly GDP releases began in 1992.

“In general, the recovery continued in the first quarter,” a spokesman for the National Bureau of Statistics, Liu Aihua, told reporters.

But Ms. Liu warned that “the foundations for the recovery must be strengthened,” referring in particular to the “uncertainties” that still prevail in the world at the level of the epidemic.

Due to an “unprecedented” low basis for comparison with a year ago, the economic data for the first quarter is “difficult to interpret,” HSBC analyst Qu Hongbin warns.

Meanwhile last year, China’s GDP for the first quarter of 2020 collapsed 6.8% – its worst economic performance in 44 years.

Then, the gradual improvement in health conditions in the spring of 2020 allowed China’s GDP to recover and return to its pre-pandemic level at the end of last year.

Thus China managed to post positive growth over the entire year of 2020 (+ 2.3%) while most other world economies were in recession.

Although the official figure for China’s GDP is questionable, it is still under scrutiny given the country’s weight in the global economy.

For its part, Chinese industrial production increased in March by 14.1% within one year, compared to 35.1% for the months of January and February combined, which is the only data available.

Retail sales, the main indicator of consumption, rose 34.2% in the one-year period in March, versus 33.8% in the January-February period.

The unemployment rate – calculated for urban residents only – was recorded in March at 5.3%, after an all-time high of 6.2% in February 2020 at the height of the epidemic.

Now that Beijing has recovered from the shock of the epidemic, it aims to hit a growth target of at least 6% this year – a figure much more modest than most economists’ forecasts.

For its part, the International Monetary Fund (IMF) expects an increase of 8.4% of GDP for the second global economy.