China GDP: first quarter growth tipped to jump above 20 per cent following historic contraction last year

China’s first quarter economic growth rate is forecast to be above 20 per cent from a year earlier, following a 6.8 per cent contraction in the first three months of 2020

But China’s unbalanced recovery from the coronavirus pandemic remains at risk and growth for the January-March period is expected to the year’s highest

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China’s first quarter economic growth rate is forecast to be above 20 per cent compared to a year earlier. Photo: AFP

Published: 2:15pm, 15 Apr 2021Updated: 4:48pm, 15 Apr 2021

China’s first quarter growth figures this year could exceed 20 per cent from a year earlier, a record high that offers fresh evidence of the robust rebound in the world’s second largest economy and its central position in driving the global recovery from the coronavirus pandemic.

The rate of gross domestic product (GDP) expansion for the January-March period is expected to be the fastest in decades, analysts said, though the figure will be coming off a low comparison base, following a 6.8 per cent contraction in the first three months of 2020.

The growth rate is also expected to be this year’s peak, as China’s economic engine cools and other major economies like the United States roar back to life. Moreover, the unbalanced nature of China’s recovery – which has been dependent on exports and state-led investment – remains at risk, analysts have warned.

Song Xuetao, head of the macro research division at Tianfeng Securities, estimated that first quarter GDP growth would jump to 20.5 per cent from a year ago, following disruptions due to the pandemic early in 2020 and a cold winter.

China is one quarter ahead of the global economic recovery

Zhu Min

Zhong Zhengsheng, chief economist at Ping An Securities, forecast earlier this month a 21 per cent growth rate, since both production and consumer demand were gaining steam.

At a meeting last week attended by Chinese Premier Li Keqiang, Peng Wensheng, chief economist at prominent investment bank China International Capital Corporation, said the Chinese economy would grow by 19 per cent in the first three months of the year, the same forecast made by analytics firm IHS Markit in a note on April 9.

Whatever the figure, it is certain to be the highest quarterly growth rate since data first began being published in 1993.

“China is one quarter ahead of the global economic recovery,” said Zhu Min, former deputy managing director of the International Monetary Fund, at an online forum on Saturday.