China’s National Bureau of Statistics announced that the mainland’s economy grew by a record 18.3% year-on-year in the first quarter of this year, but less than the median market expectation of 19%. According to economists, if we take into account the negative 6.8% growth in the same period last year, the two-year average growth rate is only 5%, which is still below the official long-term target. Coupled with the fact that export growth may not be sustainable, China’s economic outlook cannot be overly optimistic.
Chinese officials announced on Friday (16) that China’s economy grew by a whopping 18.3% year-on-year in the first quarter of this year, a record growth rate that shows that China’s economy has recovered and maintained its growth momentum after hitting a deep valley early last year due to the New Guinea virus outbreak.
Regarding the significant GDP growth in the first quarter of this year, Zhong Dajun, director of Beijing-based Grand Army Economic Consulting, said in an interview with the station that China’s economy grew negatively in the first quarter of last year, and if we deduct the negative 6.8 percent growth of last year from this year’s 18.3 percent, the actual growth is not much different from previous years: “The year-on-year comparison is the negative growth of last year. Last year’s starting point is low, the same period last year was negative growth of more than 6%, you use such a low starting point compared to your growth can not be high, if the normal growth of 6% last year, that day this year 18% minus negative growth of 6%, plus positive growth of 6, minus 12 is this year’s growth, just like the usual annual growth of 6%.”
The economy faced the test of the epidemic and the uncertainty of the external environment in the first quarter of this year. Pictured, people walk past electric cars on display at a newly opened shopping mall in Beijing, China, April 16, 2021.
China’s economy suffered a historic contraction of minus 6.8 percent in the first quarter of last year as the first appearance of the new crown virus forced a shutdown in much of the country’s domestic economy.
Combined with two years of negative growth of just 5 percent in the same period last year
However, the economy grew by 0.6% quarter-on-quarter in the first quarter of this year. As for the first quarter of this year, the economy grew 10.3% over the same period in 2019, with a two-year average growth of 5%.
Statistics Bureau said that the economy in the first quarter of this year to face the test of the epidemic and the external environment is uncertain, but the economy started well, continued to recover steadily, production demand expansion, employment and price stability. However, the foundation of economic recovery is still not solid, the long-standing structural contradictions are still prominent, and some new situations and new problems have emerged in the development.
The Bureau of Statistics said that the next step is to maintain the continuity, stability and sustainability of macro policies, deepen reform, opening up and innovation, keep the economy running in a reasonable range, and solidly promote high-quality economic development.
Zhong Dajun believes that it is good enough for China’s economy to see a recovery in growth. China was also badly affected by the epidemic, plus many small and medium-sized enterprises closed down during the epidemic,” he said. There are some stores on the streets around where I live that are not open until now and are closed.”
Liu Aihua, spokesman for the Statistics Bureau, said manufacturing investment grew 29.8 percent year-on-year in the first quarter, a two-year average decline of 2 percent, still not back to pre-epidemic levels, with the current level equivalent to about 96 percent before the epidemic.
Manufacturing investment in the first quarter grew 29.8% year-on-year, down 2% on average over two years, still not back to the level before the epidemic, the current level is equivalent to about 96% before the epidemic.
Export trade and foreign trade surplus increase does not mean the economy is good
In economics, investment, consumption and exports are often compared to the “troika” that drives GDP growth. This time, the economic growth rate reached 18.3%, mainly driven by China’s export trade.
China’s General Administration of Customs announced Wednesday (13) that in the first quarter of this year, China’s import and export of goods trade 8.47 trillion yuan, an increase of 29.2% year-on-year. In this regard, Ms. Zhang, who is engaged in import and export trade, told the station that the foreign epidemic is still serious, so this year’s economic growth relies mainly on the rebound of export data: “Some factories in Southeast Asia, for example, have not yet resumed production on a large scale, and I believe the second quarter of this year will not be too bad, because the foreign epidemic is not yet under control and has not yet resumed production on a large scale, and the large volume of exports now does not On behalf of China’s economy to good.”
Domestic price rises will eventually affect exports
As the prices of consumer goods continue to rise, China’s consumption figures are still weak at the moment. Zhong Dajun said, “Due to the substantial increase in raw material prices, resulting in Chinese exporters also can not earn much money. Domestic first of all, commodities are rising in price, commodity price increases soon spread to downstream products, and next China’s exports are going up in price.”
Official spokesman Liu Aihua said that China’s employment and structural pressure at the same time, with the economic recovery to continue to strengthen the employment priority policy. And the Bureau of Statistics survey of more than 90,000 industrial enterprises above the scale shows that 44% of the surveyed enterprises are facing difficulties in recruiting workers.
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