China has announced that its industrial output grew by 35.1%, as the country’s economic activity surged in the first two months of 2021. The government attributed the rise to the steady acceleration of manufacturing which is fired up by domestic and overseas demand.
Based on the data released by the National Bureau of Statistics, analysts say the January-February economic performances signal that China may record a GDP growth rate of between 15-20% for the first three months. This will make its first-quarter economy expansion the highest among major global economies.
The country’s economy also grew 2.3% in 2020. Chinese analysts are confident that the country is on track to achieve its annual growth goal of over 6%. This, they say, is despite the fact that the country’s 2021 GDP growth will likely slow down quarter by quarter.
Economic Activity industrial output
According to the data, in the first two months of this year, China’s industrial production rose 35.1% year-on-year. Compared to a contraction of 13.5% during the same period last year.
Also, retail sales expanded 33.8%, against a -20.5% plunge recorded for the same period last year. Fixed-asset investment shot up by 35%, compared with a 24.5% fall in 2020.
As a result, Liu Xuezhi, a senior macroeconomics expert at China’s Bank of Communications posited that China’s economy “has now come to normalcy.”
“The stunning economic indicators reflect China’s fundamentals for sustained, sound growth in the post-virus era, both on the production and the demand sides. It is now fair to say that the country’s economy has now come to normalcy.”
Liu Xuezhi
Hu Qimu, Chief Researcher at the Sinosteel Economic Research Institute, also told reporters that the recovering demand from overseas markets has helped shore up China’s January-February economy to grow at a greatly reactivated tempo.
“It is estimated that China’s Q1 GDP could grow by around 17 percent, continuing to serve as an important engine for the global economy.”
Hu Qimu
Other analysts said that China’s “stay-in-place” policies, allowed for a lesser impact on production during this year’s Spring Festival holidays. Thereby, contributing to the growth. In the past, China’s factories would suspend production for more than 15 days during the holidays.
Experts also noted that in 2021, China’s economy will proceed at a manner which features high growth in the beginning three months. But gradually gears down from the second quarter on.
“Major western countries could be growing in the opposite direction. As their economies began to be hammered by the coronavirus in the second quarter last year.”
Liu Xuezhi
Vaccine Rollout
Analysts expect the massive coronavirus vaccine rollout in the country to pave the way for global factory resumption. According to them, this could in turn weaken foreign demand for China’s exports in the coming months. An uncertainty they say China will be tackling this year sooner or later.
They urged Chinese policymakers to consider over more measures to shore up domestic consumption, which has not yet returned to pre-virus levels despite a 33.8% rise. The country has set an economic growth target of “above 6 percent” for 2021.
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