China's economy to continue to gain momentum in coming months: UK think tank

LONDON, April 16 (Xinhua) -- China's economy is expected to continue to gain momentum in the coming months as exports and manufacturing investment see optimistic growth, British think tank Oxford Economics said in a report released Friday.

"We expect the economy to continue to gain momentum in the coming months, with a rotation in terms of the drivers of growth taking hold," said the report.

The report came as China's official data showed the country's economy grew 18.3 percent year on year in the first quarter (Q1) of 2021, as strong domestic and foreign demands powered recovery from a low base in early 2020 when the COVID-19 pandemic stalled the world's second-largest economy.

The gross domestic product (GDP) of China 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.

The Oxford Economics voiced no surprise that "all key activity indicators recorded substantial y/y increases in March and Q1 as a whole, supported by favourable base effects", predicting the robust economic growth will persist.

"Household consumption should gain momentum as confidence improves and coronavirus caution recedes," said the think tank, adding that "this hinges on convincing vaccination and further improvements in labour market conditions."

The recent PMI (Purchasing Managers' Index) readings suggest labour market conditions are gradually improving, said the Oxford Economics, noting the body "will pay close attention to how the vaccination strategy and employment growth will evolve in the coming months."

Meanwhile, China's total imports and exports of goods surged 29.2 percent year on year to 8.47 trillion yuan (about 1.29 trillion U.S. dollars) in Q1 of 2021, according to figures released on Wednesday by the Chinese General Administration of Customs (GAC).

The British think tank forecast China's exports and imports are both expected to see strong growth in the rest of 2021 amid positive global and domestic economic recovery. In the meantime, "the strength in exports and improvement in business confidence should bolster corporate investment this year."

"Indeed, latest official PMI readings suggest domestic and external demand are gaining pace," it added.

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).