China economy set a blistering pace in the first quarter, soaring 18.3%, the National Bureau of Statistics said Friday, stunning observers with a continued rapid recovery from widespread economic disruptions caused by coronavirus lockdowns in early 2020.
China's economy expanded at a 6.5% pace in the last quarter of 2020. Gross domestic product (GDP) rose 0.6% quarter-on-quarter in the first quarter of this year.
A Reuters poll before the data release showed analysts see 2021 economic growth at a decade-high of 8.6% in China, compared to a 2.3% gain last year. The poll saw first quarter growth at 19.0%
China also reported March factory output leaped 14.1%, retail sales soared 34.2% and fixed-asset investment rose 25.6% on year.
The key economic indicator from China for the first quarter are compared to a weak base in the first quarter of 2020, analysts said, adding that though headline number is impressive there is room to see it as a one-time event.
"This tells us little about the economy's current momentum, however, since it reflects a much weaker base for comparison from last year's COVID-19 downturn," said Julian Evans-Pritchard, senior China economist for Capital economics in Singapore.
"All told, the momentum looks to have been broadly stable in March. But this was not enough to prevent a weaker first quarter following a slowdown around the turn of the year. The upshot is that with the economy already above its pre-virus trend and policy support being withdrawn, China's post-COVID-19 rebound is levelling off."
In comments after the data release, a spokeswoman for the NBS said there was continued improvement to both production and demand, adding the economy would continue to improve this year.
However, the spokeswoman warned the foundation for the economic recovery was yet to be consolidated amid a highly uncertain international landscape and with long-term structural problems lingering.
Luis Kuijs, head of Asia economics for Oxford Economics, suggested that other indicators such as retail sales reflect solid momentum for the economy so far in 2021.
"Promisingly, the monthly indicators suggest that industrial production, consumption and investment all gained pace in March on a sequential basis, following the weakness in the first two months," he said.
China's overall recovery has been led by exports and renewed domestic spending despite sporadic COVID-19 cases in some cities.
There have been some concerns about inflation and a tighter central bank monetary policy stance, but the country's annual economic growth target at above 6% this year sees well achievable, and is even well below expectations even after Friday's data, giving some wiggle room on economic policy.
