China’s record 18.3% growth boosts global recovery hopes – business live


Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

The economic recovery from the pandemic continues today, with China reporting its strongest economic growth since records began nearly three decades ago.

The world’s second largest economy expanded by a record-breaking 18.3% in the first quarter of 2021 compared to a year earlier, when the coronavirus outbreak forced strict lockdowns and travel restrictions.

That’s the best year-on-year growth since 1992, when China started publishing such figures, and up from 6.5% in the last quarter of 2020.

jeroen blokland
(@jsblokland)

ICYMI! #China‘s #GDP grew by 18.3% YoY in Q1.
ht @acemaxx pic.twitter.com/FgB061Eipm


April 16, 2021

However, on a quarter-on-quarter basis, the Chinese economy grew by a more modest 0.6% in the January-to-March period – slower than expected.

The recovery was driven by a surge in consumer spending — retail sales surged by 34.2% year-on-year in March, beating forecast of a 28% rise.

China’s factories also benefitted from the pick-up in global demand, with output rising by 14.1% year-on-year in March. However, that is down on the 35.1% surge seen in the January-February period, suggesting growth may be moderating.

“The national economy made a good start,” National Bureau of Statistics spokesperson, Liu Aihua, told reporters on Friday.

Liu also flagged that the strong growth was also due to a low base effect (as the economy contracted so sharply a year ago), as AFP explains:


The sharp spike was partly due to “incomparable factors such as the low base figure of last year and increase of working days due to staff staying put during the lunar new year” holiday, said Liu.

But she added that quarter-on-quarter growth has “demonstrated a steady recovery”.

With the US also reporting a near 10% surge in retail sales last month, and a fall in new jobless claims, the global economic recovery appears on track for a solid recovery this year.

That pushed Wall Street to fresh record highs overnight, with the Dow Jones industrial average breaking through the 34,000-point mark for the first time.

Ipek Ozkardeskaya, senior analyst at Swissquote, points out that US bond yields actually fell back yesterday, suggesting investors put aside recent worries that central banks could tighten monetary policy to fight inflation.


Was it because the abnormal rise in retail sales was the direct result of the latest stimulus checks – which certainly is, and should not last to have a durable impact on inflation expectations, or was it because there are still 8 million jobless Americans that need to find a job before the Fed decides to tighten its purse’s strings is yet to be seen.

But the enthusiasm regarding the very good data somewhat surprised and brought many to conclude that Jerome Powell is doing a great job keeping the market hypnotized, or simply high on excess liquidity.

More reaction to follow.

The agenda

  • 10am BST: Eurozone inflation for March (final estimate)
  • 1.30pm BST: US building permit and housing starts for March
  • 3pm BST: University of Michigan Consumer Sentiment survey for April





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