However, the quarterly comparison showed a slowdown, with analysts predicting that construction and exports would end.
China’s economy posted record growth rates in the first quarter compared to the same period last year, when the country was in a launchdown to control the coronavirus.
However, compared to the last quarter of 2020, the growth rate has slowed, official figures show, raising questions about the strength of the recovery for the rest of this year.
According to the National Bureau of Statistics, gross domestic product (GDP) grew by 18.3 percent in the first three months of the year-based 2021. In a survey conducted by Reuters news agency, the figure was slower than economists forecast 19 percent growth and 18.5 percent on Bloomberg.
On a quarter-on-quarter basis, GDP grew 0.6 percent in the first three months, slower than the revised 3.2 percent growth recorded in the previous three months and below analysts’ forecasts.
“China’s GDP growth has reached record highs [year-on-year] Terms last quarter. However, this is due to a weaker foundation than last year’s historic recession, “said Julian Evans-Pritchard, a senior economist at Capital Economy, in a note sent to Al Jazeera.
“Inside [quarter-on-quarter] Conditions dropped except except for significant increases [the first quarter of] Last year, the last decade was slower than at any other time, ”he added.
Breaking down the headline numbers showed weaknesses in key sectors of the economy.
According to the capital economy, growth in industrial and construction activities slowed to 1.3 percent in the first three months of the year from 2.3 percent in the fourth quarter of 2020, based on quarter-on-quarter comparisons. Meanwhile, the services sector declined 2.3 percent after a 3.9 percent expansion based on the same comparison.
Dutch bank ING has blamed restraint in industrial production growth on declining demand for clothing and a decline in production of smart devices, possibly due to a global shortage of computer chips. According to ING, strict anti-pollution measures imposed on refineries could contribute to the slow growth of industries.
But other parts of the economy continue to perform strongly.
Retail sales rose 1.8 percent in March from a month earlier, expanding 1.5 percent in February.
More chips, please
Looking ahead, analysts say China’s economy is unlikely to be able to sustain rapid growth in the first quarter, as the government relies on a number of stimulus measures that began during the depths of the crisis.
“Most quarters will have to experience moderate growth because it will be very difficult to replicate ‘very high’ growth without a base effect to compare,” Iris Pang, chief economist at ING in Greater China, told Al Jazeera in a note.
Paap said the lack of chips – which have severely depleted cars and important computer network equipment such as routers in the United States and Japan – and the direction of Sino-US relations could also be key factors in determining China’s recovery power.
“Sino-US relations will be important for China’s economic growth in most areas of technological development. “Perhaps the United States will continue to put more pressure on China,” Punk said.
“Concerns about the chip crisis have become a practical problem for businesses ranging from investment to manufacturing to exports and domestic sales. It is unknown at this time what he will do after leaving the post. “
For the full year, ING expects China’s economy to expand 8.6 percent, a faster growth than its previous 7 percent forecast.
This will exceed the government’s annual growth target of 2021 percent.