the westminster news
Published by the students of Westminster School
By Heather Zhu ’23
China has reported an 18.3% Gross Domestic Product (GDP) growth in the first quarter of 2021 in comparison to the same period last year. This is not only the highest annual economic growth recorded since China started keeping records nearly 30 years ago, but also far beyond the Chinese government’s goal of a 6% annual economic growth. Although this surely is impressive, does this number present an accurate snapshot of China's economy? What does this growth mean in a broader context?
What do the statistics reveal?
During the lockdown, much of China’s economy was shut down, and the retail industry took a big hit. China’s success in combat against Covid-19 ended the lockdowns in April, and the economic growth began to normalize to 11.6% in the second quarter, 3% in the third quarter, and 2.6% in the last quarter. Hence, for the first time, the increasing demand for exports allowed China to surpass the United States in becoming the biggest trading partner of the European Union. Also, being the first nation to begin recovery allowed China to manufacture and export large amounts of personal protective equipment (PPE) such as masks and work-from-home gears such as laptops. Thus, the industrial output rose 14.1% in March of 2021, and retail sales expanded by 34.2%, both of which reached beyond economists’ projections. Investment in fixed-asset such as real estate climbed 25.6% in the first quarter compared to last year, and inbound investment into China rose almost by 40% to $45 billion in the first three months of 2021. However, it is essential to point out that if the GDP is compared on a quarter-to-quarter basis, it is evident that the economy shrank 9.7% from the last quarter of 2019 to the first quarter of 2020. While the shockingly high GDP growth does not paint an accurate picture of a country’s economic growth as it is a weak comparison base, it still depicts the strong rebound after lockdowns. As China begins to gain greater momentum in economic recovery, I am confident that its national economy will soon return to pre-pandemic conditions.
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