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ON MARCH 5TH at its annual parliament, the National People’s Congress (NPC), China’s government revealed an economic-growth target of “more than 6%” for this year, a bar it is expected to clear with ease. Take the latest data. China’s key economic indicators for January and February, published on Monday, were buoyant. Industrial production and retail sales, for example, are soaring—35.1% and 33.8% higher than a year ago, respectively, beating consensus forecasts. Fixed-asset investment surged by 35% year on year, but still fell below expectations.
This year’s rocket-fuelled figures are even harder to decipher than usual because they are compared with record lows last year, during the first wave of covid-19 outbreaks. Macquarie, a bank, says that if you remove the effect of the pandemic, underlying retail sales were up by 3.1% for the first two months of 2021. This implies consumption accelerated after a few small outbreaks were brought under control in Beijing in January. Oxford Economics, a research group, says it expects household consumption to become the main engine of economic growth from the second quarter of 2021, as travel restrictions are eased. But in the first quarter, growth will remain sluggish.
Publication Date: 16 March 2021
Publication Site: The Economist