China announces record growth in Q1

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

This sharp acceleration in China’s gross domestic product (GDP) was widely anticipated, a group of analysts polled by AFP also forecast an even greater increase (18.7%).

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

“Overall, the recovery continued in the first quarter,” National Bureau of Statistics spokesperson Liu Aihua told reporters.

But “the foundations of the recovery must be consolidated,” however warned Ms. Liu, referring in particular to the “uncertainties” that persist in the world on the epidemic level.

As a result of an “unprecedented” low basis for comparison with last year, economic data for the first quarter is “difficult to interpret,” warns HSBC bank analyst Qu Hongbin.

At the same time last year, China’s first quarter 2020 GDP collapsed 6.8% – its worst economic performance in 44 years.

The gradual improvement in sanitary conditions in spring 2020 then allowed Chinese GDP to rebound and return to a pre-pandemic level at the end of last year.

China was thus able to record positive growth over the whole of 2020 (+ 2.3%) while most of the other world economies were in recession.

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

For its part, Chinese industrial production rose in March by 14.1% over one year, against 35.1% for the months of January and February combined, the only data available.

Retail sales, the main indicator of consumption, for their part increased by 34.2% over one year in March, against 33.8% in January-February.

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

Now recovered from the epidemic shock, Beijing is aiming for a growth target of at least 6% this year – a figure much more modest than most economists’ forecasts.

The International Monetary Fund (IMF), for its part, expects an 8.4% increase in the GDP of the world’s second-largest economy.