According to preliminary estimates of National Bureau of Statistics of China, the gross domestic product (GDP) in the first quarter of 2021 reached 24,931.0 billion yuan, up by 18.3 percent year on year, or up by 0.6 percent QoQ and 10.3 percent over that in the first quarter of 2019, with an average two-year growth of 5.0 percent at comparable prices.
By industry, the value added of the primary industry was 1,133.2 billion yuan, up by 8.1 percent year on year, or an average two-year growth of 2.3 percent; that of the secondary industry was 9,262.3 billion yuan, up by 24.4 percent year on year, or an average two-year growth of 6.0 percent; and that of the tertiary industry was 14,535.5 billion yuan, up by 15.6 percent year on year, or an average two-year growth of 4.7 percent.
On the one hand, the year-on-year GDP growth of 18.3 percent in the first quarter was affected by such incomparable factors as the low base figure of last year and increase of working days due to staff staying put during the Spring Festival.
On the other hand, the quarter-on-quarter growth of 0.6 percent in the first quarter with the average two-year growth reaching 5.0 percent demonstrated a steady recovery of China’s economy.
In the first quarter, the nationwide per capita disposable income of residents was 9,730 yuan, a nominal increase of 13.7 percent year on year, with an average two-year growth of 7.0 percent, or a real increase of 13.7 percent year on year after deducting price factors, with an average two-year growth of 4.5 percent.
In terms of permanent residence, the per capita disposable income of urban households was 13,120 yuan, a nominal increase of 12.2 percent year on year and a real increase of 12.3 percent; the per capita disposable income of rural households was 5,398 yuan, a nominal increase of 16.3 percent year on year and a real increase of 16.3 percent.
In terms of income source, the nationwide per capita salary income, net operative income, net property income, and net income from transfers saw year-on-year growth of 12.4 percent, 19.5 percent, 17.0 percent and 10.7 percent in nominal terms respectively.
The per capita disposable income of urban households was 2.43 times that of the rural households, 0.09 less than the ratio of the same period last year. The median of the nationwide per capita disposable income was 8,014 yuan, an increase of 12.7 percent.
China’s economy expected to grow by 7.9 pct in 2021
The Chinese economy continues its fast recovery from the pandemic. IMF forecasts that China’s GDP growth is projected at 1.9% in 2020 and 7.9% in 2021.
In its latest Global Economic Prospects released Tuesday, the World Bank also expected China’s economy to expand by 7.9 percent in 2021.
Core inflation is expected to remain subdued, leaving CPI inflation in 2020-2021 below the pre-crisis target of about 3 percent. Corporate leverage is expected to rise by about 10 percentage points of GDP in 2020.
The current account surplus is projected to widen to 1.9 percent of GDP in 2020 from 1.0 percent in 2019, before narrowing to below 1 percent in 2021.
The projected temporary increase this year reflects lower commodity prices, the collapse in outbound tourism, and a surge in exports of pandemic-related and other goods supported by China’s early recovery of production and higher export prices.
Macroeconomic and financial policies have supported the recovery. Policymakers have provided financial relief and fiscal support to protect the most-affected firms while safeguarding financial stability, including by providing liquidity to the banking system, expanding re-lending facilities to smaller enterprises, and introducing a repayment moratorium until Q1 2021.
The authorities have also increased the disbursement and coverage of unemployment insurance to help vulnerable households and provide tax relief and waived social security contributions by employers.
Against this backdrop, the general government deficit (including estimated off-budget investment spending) is projected to rise to 18.2 percent of GDP in 2020 from 12.6 percent in 2019.
Structural reforms have progressed despite the pandemic, but not evenly across key areas. The opening of the financial sector has advanced with a further shortening of the negative lists for foreign investment and the removal of restrictions on the investment quota for foreign institutional investors.
Labor market reforms, such as hukou reforms, have improved labor mobility, and the patent law was amended to strengthen intellectual property protection and foster innovation.
At the same time, progress in real-sector reform has been slow, especially in the area of state-owned enterprises and competitive neutrality between private and state-owned firms.