Miracle in the East: China Surpasses Expectations with 5.3% First Quarter Economic Growth

Despite the challenges posed by a property crisis and a slowdown in demand, China’s economy expanded by 5.3% in the first quarter of 2021. This growth was fueled by government initiatives to boost economic demand, surpassing expectations and even exceeding a Reuters analyst forecast of 4.6%. The National Bureau of Statistics in China noted that the economy had a strong start in the first quarter, providing a solid foundation for the rest of the year. However, economic stability was not yet firmly established.

Since the onset of the Covid-19 pandemic, China has faced several challenges in its real estate sector, with several Chinese real estate behemoths defaulting on their debts. In recent years, Evergrande and Country Garden have been among those that have faced financial difficulties. Despite these challenges, the property sector continued to face difficulties in the last quarter, with property investment plummeting by 9.5% year-on-year. On the other hand, China’s industrial output surged by 6.1% in the last quarter while retail sales and fixed investment in factories and equipment also posted gains.

The Lunar New Year celebrations at the end of January likely boosted household spending in the last quarter. However, both imports and exports in March were down compared to the same month previous year, with exports declining by 7.5%. Despite these challenges, Beijing has set a GDP growth target of 5% for