China's gross domestic product (GDP) is expected to hit double-digit growth for the first quarter of 2021, experts said, as the economy swiftly recovers in the first half of this year from a low base a year earlier.
The director-general of the Department of Macroeconomic Research under the Development Research Center of the State Council, Chen Changsheng, said that double-digit growth is likely given the low base in 2020. The country's output hit record lows last year due to economic headwinds caused by the prolonged pandemic.
Chen cautioned that recording double-digit growth in the coming quarters doesn't necessarily translate to actual growth in the economy. He said that the low base will understandably result in a much higher rebound. He said that analysts should look at the figures more "rationally" and not as an indication that the economy is "overheating."
Chen said that with the low-base factor aside, the month-on-month growth of the country's output does indicate steady economic growth throughout 2021. Chen said that the potential hurdles to the continued growth are the risk of premature or sudden strengthening of policies aimed at keeping the economy at a reasonable range.
Chen said that other factors and challenges should also be considered with mapping out the trajectory of the country's output. This includes the potentially large fluctuations in the dollar exchange rate, debt defaults in the financial and real estate sectors, and spillover from the easing of policies by other major economies.
China previously set a target of hitting a per capita GDP level in line with moderately developed countries by 2035. This is effectively double that of the country's figures in 2020. Chen said that in order to achieve that goal, China will need to keep a 4.7% GDP growth each year moving forward.
For 2021, government economists are heavily relying on the recovery of the country's small to medium-sized enterprises and general consumption activities to drive economic growth. Chen said that the government's priority will be to restore consumption as soon as possible.
To achieve this, the government is working to formulate measures and policies to restore consumer confidence and improve income generation. Chen said that the government is also looking into tapping new growth drivers - such as urban renewal, green transformation, and participation in global initiatives.