China’s economy grows 18.3% in post-Covid comeback

China’s economy grew a record 18.3% in the first quarter of 2021 compared to the same quarter last year. While it’s the biggest jump in the gross domestic product (GDP) since China started keeping quarterly records in 1992.

However, Friday’s figures are below expectations, with a Reuters poll of economists predicting 19% growth. They are also heavily skewing, and less indicative of strong growth. As they are comparing to last year’s huge economic contraction.

While in the first quarter of 2020, China’s economy decreased 6.8% due to nationwide lockdowns at the peak of its COVID-19 outbreak. The national economy made a good start, said China’s National Bureau of Statistics, which released the first-quarter data.

But it added: We must be aware that the COVID-19 epidemic is still spreading globally and the international landscape is complicating with high uncertainties and instabilities. Other key figures released by China’s statistics department also point to a continuing rebound. But also unusually strong because they are comparing against extremely weak numbers from last year.

On the other side, Industrial output for March rose 14.1% over a year ago. While retail sales grew 34.2%. It’s ironic that China’s economic boom has been announced just as its leader wrestles with the problem of climate change which has been caused by economic growth over the decades.

China Economic Momentum:

Logically, that growth has been almost completely fuelled by emissions from burning coal, gas, and oil. China has promised to freeze its growth in emissions by 2030 and halt them totally by 2060.

However, President Xi is hearing from France’s President Macron and Germany’s Chancellor Angela Merkel that it can and should freeze emissions earlier-perhaps by 2025. Leaders of the EU and US are also urging China to stop funding new coal-fired. Power plants in poor nations in the so-called Belt and Road initiative.

Moreover, Yue Su, the Economist Intelligence Unit’s principal economist for China. While the latest figures show that country’s economic recovery is broad-basing. Some production and export activity could “front-loaded” into the first quarter, suggesting slower growth ahead.

Trade performance and domestic industrial activities for the rest of the year might not be able to maintain such strong momentum. Due to a lack of measures to stimulate the domestic economy, she said. The figures nevertheless suggest China has continued to gain economic momentum.

While comparing growth for the last quarter with the last quarter of 2020, the Chinese economy grew by a far smaller 0.6%. Helped by strict virus containment measured and emergency relief for business, the economy has recovered steadily since the pandemic hit.

In spite of a disastrous start to the year, China was the only major economy to register growth in 2020 albeit its weakest in decades, at 2.3%. China has set an economic growth target of 6% for 2021, after scrapping its target last year.