Digital Zeitgeist – After Covid’s Reopening China’s Economy Recovers More Quickly Than Anticipated
After the nation loosened its rigorous Covid-19 restrictions and consumer spending soared, China’s economy recovered more quickly than forecast, outpacing growth projections for the first quarter of the year.
According to the National Bureau of Statistics, the second-largest economy in the world expanded at a pace of 4.5% when compared to the same quarter a year earlier. The rate of growth outpaced the 4% rise predicted by economists surveyed by Reuters and was the fastest in a year.
With retail sales growing 10.6% in March, the highest increase in nearly two years and more than double the expected rate, China’s consumer economy showed indications of recovery. The same month saw a 3.9% increase in industrial production over the same period last year, which was a five-month high.
“The speed of the recovery has exceeded even our relatively upbeat expectations,” said Julian Evans-Pritchard, head of China economics at Capital Economics, adding that full-year growth could reach 6%, exceeding the government’s official target of about 5%.
“With consumer confidence on the mend and credit growth accelerating, there is still scope for a further pickup in activity over the coming months,” he said.
After pandemic restrictions and trade limitations with the US hampered development, China’s economy is now growing. The Chinese authorities continued in rolling lockdowns and mass testing to halt Covid-19’s spread for over three years. Except for the Covid-hit 2020 year, China’s GDP grew at its weakest rate since the middle of the 1970s in 2022.
Health officials hastily lifted most quarantine regulations after huge protests in November and reopened borders to foreign tourists, sparking chaos across the nation as the death toll from Covid-19 unexpectedly rose.
Supply chain disruptions have been cited as a potential threat to China’s economic recovery by analysts.
China announced a modest 5% annual growth goal in March but acknowledged that Covid-19 and other regional and global issues had had a “beyond our expectations” impact on the economy.
online sources: theguardian.com, stats.gov.cn, capitaleconomics.com