In the first quarter of 2021, China’s economy had a strong start under the leadership of President Xi Jinping. According to the National Bureau of Statistics, GDP grew by 5.3 percent, surpassing expectations and showing an improvement from the previous quarter. Industrial production and agriculture saw growth of 6.1 percent and 3.8 percent, respectively, while services grew by 5 percent.
The NBS attributed this positive performance to the effective policies implemented under the guidance of the Central Committee of the Communist Party of China. The agency noted that production and demand remained stable, employment and prices were generally steady, market confidence was on the rise, and high-quality development was progressing.
Despite these encouraging figures, recent data showed a decline in exports and imports in March, falling short of expectations. Fitch Ratings recently downgraded China’s sovereign credit outlook to negative due to risks in its public finance outlook. Moreover, challenges such as a heavily indebted real estate sector and a shrinking population remain for China to sustain economic recovery.
In response to these challenges, Chinese officials have introduced fiscal and monetary policy measures to boost the economy further. For instance, Beijing has set a growth target of 5 percent for 2024, which would outperform most developed economies but represent one of China’s slowest expansions since 1990.
