China says its economic system grew 18.3% within the first quarter, which was barely in keeping with expectations
People buy Apple products in the new Apple flagship store on the opening day after the coronavirus disease (COVID-19) outbreak in Sanlitun in Beijing, China on July 17, 2020.
Thomas Peter | Reuters
BEIJING – China reported gross domestic product slightly below expectations for the first quarter as industrial production disappointed but retail sales exceeded.
The GDP rose in the first three months of the year by 18.3% compared to the previous year, the Chinese statistical office announced on Friday. According to analysts polled by Reuters, this is slightly below expectations of a 19% increase.
The surge in growth came from a decline in the first quarter of last year, when the economy contracted 6.8% during the peak of the domestic Covid-19 outbreak. China was the first country to deal with the disease, and the economy grew again in the second quarter of last year.
According to the statistics office, GDP rose by 10.3% in the first quarter compared to the same period last year.
China also said retail sales rose 34.2% in March, beating expectations of 28% growth.
Industrial production rose 14.1% in March, falling short of Reuters’ forecast growth rate of 17.2%.
The slower growth in industrial production was due to more workers staying employed during the Spring Festival rather than traveling home for a month’s vacation.
The statistics bureau warned in an English-language statement that the worldwide spread of Covid-19 and the “international landscape are associated with high uncertainties and instabilities”.
“The foundation for the domestic recovery has yet to be consolidated and the longstanding structural problems remain in the foreground with new situations and problems arising from development,” the office said.
The unemployment rate surveyed in cities fell to 5.3% in March, but that of the youngest Chinese workers, ages 16-24, remained high at 13.6%, the data showed.
“The employment problem of young people still takes time to get under control,” said Liu Aihua, spokeswoman for the National Bureau of Statistics, according to a CNBC translation of her Mandarin-language remarks. “The overall pressure on this aspect exists.”
She added that other surveys have found a lack of general manpower and highly skilled talent. Liu said the office recently found in a survey of more than 90,000 industrial companies that a historically high rate of 44% said hiring was their biggest problem.
Friday’s data release indicated steady but slower growth in the Chinese economy as it extends beyond the initial post-pandemic growth spurt.
First quarter GDP rose 0.6% from the fourth quarter, a slowdown from a quarterly increase of 2.6% in the last three months of 2020.
“We do not expect China’s policymakers to undergo any significant tightening, considering that the recovery is still facing headwinds and uncertainties (e.g. domestic demand is still quite subdued, the recovery in consumption remains.) gradual and exports saw exceptional growth rates to begin with. This year could face competition from other reopening economies later, “Bruce Pang, director of macro and strategic research at China Renaissance, said in a statement.
Investment in manufacturing has declined 2% on an annualized basis over the past two years, which the statistics bureau spokesman on Friday attributed to ongoing business difficulties and a lack of investment confidence.