China’s GDP grew by 18.3 percent year-on-year in the first quarter of 2021, the fastest in three decades, since the data was released, with key economic indicators all expanding at over 20 percent, setting an encouraging start for the year buoyed by a low base, soaring overseas demand and rebounding consumption at home.
The stellar data offers a glimpse into the strength of China’s economic recovery, which has been retaking lost ground since the second half of 2020. The country is likely to record the highest growth among major economies and make the greatest contribution to the global economy in the first quarter, on top of the US, analysts noted.
Looking ahead, China’s economy is forecast to keep a stable growth, but may enter “unchartered waters” in the second half of the year as geopolitical tensions keep developing and the marginal effect of global economic recovery has weakened.
Some analysts are upbeat about China’s GDP which might gain by a double-digit growth in the second quarter. For the whole year, the growth rate could reach 9 percent, analysts said, well above the government-set goal of above 6 percent.
In the first three months, China’s GDP grew 18.3 percent to 24.9 trillion yuan（$3.82 trillion), compared with a 6.8-percent contraction in the same period last year when the economy came to a standstill amid the coronavirus lockdown.
Retail sales soared 33.9 percent, fixed-asset investment jumped 25.6 percent, and industrial production gained by over 24.5 percent, data released by the National Bureau of Statistics (NBS) showed on Friday.
The slew of indicators came in line with estimates, Liu Xuezhi, a senior macroeconomic analyst at Bank of Communications, told the Global Times on Friday.
The consumption rally, at a pace apparently faster than the rebound in factory activity, sets the economy for a strong comeback to pre-virus levels, the analyst reckoned.
In March alone, retail sales jumped 34.2 percent year-on-year, with the growth rate quickening 0.4 percentage points from the reading for the first two months, per NBS figures.
Industry observers said the data underscores a broadened recovery momentum, particularly in March, which marks a watershed in consumption from “divergent recovery” to “going full swing.”
“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 rollout of a vaccination plan across the country, there was a turnaround in March,” Lian Ping, head of the Zhixin Investment Research Institute, told the Global Times.
“With three minor vacations in the second quarter and consumer confidence being improved, consumption will continue to gain steam in the April-June period,” Lian added.
“The pace of the economic recovery in the second and following quarters would rely more on the recovery of the service sector,” global asset management giant Fidelity International said in a note sent to the Global Times on Friday.
According to domestic travel data during the Qingming Festival in early April, the number of travelers and hotel bookings posted a substantial increase compared with previous holiday breaks, indicating that “pent-up consumption demand may cause a retaliatory rebound,” Fidelity International said, stressing more sustainable economic growth is still reliant on the recovery of incomes.
In a convincing sign of revenge spending, train tickets to some of the most popular destinations for the upcoming May Day holiday have been sold out the moment they became available, causing platforms to temporarily crash.
Analysts also highlighted the role of flooding overseas orders in shoring up China’s industrial production acceleration in the first three months.
“The global economy seems to be walking out of the pandemic-induced recession, which will boost foreign demand for Chinese merchandise until at least June. This is in contrast to last year, when the recovery of the supply side outpaced that of demand,” Tian Yun, vice director of the Beijing Economic Operation Association, told the Global Times.