CHINA'S economy grew at a record pace during the first quarter as it rebounded from a historic contraction caused by Covid-19, and boosted by exports and domestic demand, according to a poll of analysts conducted by AFP.
The world's second-largest economy is tipped to have expanded 18.7 per cent year-on-year, according to the average forecast by economists from 15 institutions, having been the only major one to grow at all last year.
While the virus first emerged in central China in late 2019, the country was also the quickest to bounce back after authorities imposed strict lockdowns and virus control measures.
Analysts forecast that China's gross domestic product (GDP) growth for the whole year will be 8.5 per cent, markedly higher than the government's modest target of above 6 per cent. It is also a strident advance from 2.3 per cent growth in 2020.
"Monthly indicators released recently all pointed toward a sustained strong recovery in China in the first quarter," said Christina Zhu, an economist at Moody's Analytics. "Production output grew robustly while both external and domestic demand continued to improve."
The dramatic spike was also largely driven by the low base of comparison with last year, when the outbreak brought most business activity to a standstill, said Rabobank senior economist Raphie Hayat.
The prediction comes after data on Tuesday showed imports and exports continued to boom in March as the nation's recovery continued apace and demand picked up in key overseas markets as they emerged from last year's virus crisis.
This year's Lunar New Year - typically a period when workers travel across the country to visit family and friends - also gave a boost to the economic outlook. Many migrant workers heeded authorities' calls to stay put in the cities where they work during the break owing to fears that the annual mammoth migration might lead to coronavirus outbreaks. This allowed enterprises, especially large ones, to bump up factory output and continue fulfilling orders, said Gene Ma, head of China research at the Institute of International Finance.
Although the country saw some local clusters in the early months of the year, these quickly came under control.
"Domestic demand should gain momentum in March as coronavirus caution recedes and travel and logistics return to 'normal'," said Oxford Economics' lead economist Tommy Wu.
ANZ Research senior China economist Betty Wang said there has also been "buoyant activity" in the period after the Lunar New Year, with rebounding retail sales as local restrictions were lifted and domestic travel increased.
While some economists expect growth to slow in the second half of the year, most are bullish about China's prospects - largely because of the domestic Covid-19 situation.
"Accelerated vaccine distribution will help the services sector to rebound, stabilising the labour market and supporting income growth," said Ms Zhu of Moody's. "This will in turn speed up domestic demand recovery and prop up production.".
A global economic rebound will also fuel demand for China-made goods, she said. AFP