Strong start to 2021, China economy powers ahead for high-quality growth

BEIJING, April 16 (Xinhua) -- China's economy grew 18.3 percent year on year in the first quarter of 2021, as strong domestic and foreign demands powered recovery from a low base in early 2020 when COVID-19 stalled the world's second-largest economy.

The gross domestic product (GDP) reached 24.93 trillion yuan (about 3.82 trillion U.S. dollars) in Q1, up 0.6 percent from the fourth quarter of last year, data from the National Bureau of Statistics (NBS) showed Friday.

A strong start to the 14th Five-Year Plan (2021-2025) period, the double-digit year-on-year rebound puts average Q1 growth of 2020 and 2021 at 5 percent from the 2019 level.

The Chinese economy registered a 6.8-percent contraction in Q1 2020 due to the novel coronavirus. Thanks to resolute and effective virus control, the global growth engine regained its footing with a V-shaped comeback by attaining three consecutive quarters of a rebound last year (3.2 percent in Q2, 4.9 percent in Q3 and 6.5 percent in Q4).

"Full-year economic growth is likely to maintain a stably consolidating and improving trend," said NBS spokesperson Liu Aihua at a press conference, citing the country's growing intrinsic development momentum, supply quality and market vitality as major support for sustained recovery.

Friday's data sent encouraging signs across the board. In Q1, China's value-added industrial output, retail sales and fixed-asset investment went up 24.5 percent, 33.9 percent and 25.6 percent, respectively.

Workers weld at a workshop of an automobile manufacturing enterprise in Qingzhou City, east China's Shandong Province, Feb. 28, 2021. (Photo by Wang Jilin/Xinhua)

Driven by the rising demand at home and abroad, total imports and exports of goods surged 29.2 percent year on year to 8.47 trillion yuan.

"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 North Managing Partner, told Xinhua in an interview.

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."

People eat snacks at an alley in Wuhan, central China's Hubei Province, March 28, 2021. (Xinhua/Cheng Min)

Despite the economic rebound, the NBS warned of high uncertainties and instabilities as COVID-19 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 in a statement.

While China's economic growth momentum has been reassuring, there are still looming uncertainties such as the spread of COVID-19, volatile external demand and fast-changing geostrategic relations, said Cheong.

"Gradualism is a key emphasis of China's monetary policy in 2021," he said.

This year, China aims to expand its economy by over 6 percent, create more than 11 million new urban jobs and expand domestic demand and effective investment, which are expected to put the economy firmly back to pre-pandemic vibrancy.

It will pursue high-quality development, advance supply-side structural reform and consolidate and expand the achievements of the COVID-19 response and economic and social development, among other major tasks, according to a government work report.

Wen Bin, a chief analyst at China Minsheng Bank, said China's macro policy this year has to balance multiple tasks including stabilizing growth, controlling risks, containing leverage and guarding inflation.

While solidifying the recovery foundation to keep the economy within a proper range, Wen called for attention to imported inflation brought by price rises of global commodities, stressing efforts to keep yuan basically stable to prepare for possible risks at home and abroad.

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