Graph of dynamics (in% y / y) of China’s GDP (white), industrial production (blue) and retail sales (orange). Source: Bloomberg
China’s economy showed strong growth in the first quarter amid rising consumer spending. This suggests a more balanced recovery, as investment and exports were the main drivers of growth last year.
China’s GDP grew in the first quarter by a record 18.3% y / y, which was still slightly below the consensus forecast of 18.5% y / y. Retail sales also showed a record growth (+ 34.2% y / y versus the forecast + 28% y / y), while the growth rate of industrial production slowed down somewhat (+ 14.1% y / y versus the forecast + 18% y / y) …
In the first quarter of 2020, the Chinese economy showed a record drop, but by September it had won back all the losses. This was facilitated by a sharp increase in the export of medical products and electronics. Consumer spending has lagged markedly all this time, but the data for the first quarter of this year is encouraging.
The Chinese economy is far from overheating, as the recovery is still uneven, says Bruce Pang, head of strategic research at China Renaissance Securities. Therefore, in his opinion, the Bank of China will not rush to tighten monetary policy.