Economic growth began to pick up again in China during the first three months of the year, after the government abruptly lifted strict “zero Covid” measures in early December.
The Chinese economy grew 4.5 percent from January to March compared with the same months last year, the country’s National Bureau of Statistics said on Tuesday. Strong retail sales, up 10.6 per cent in March from the previous year, led the way.
The stakes for the rest of the world are high. China has been the single largest engine of global growth for most of the past two decades. Despite simmering tensions with the US, and growing disagreements with Europe, China remains heavily interdependent on both their economies. The International Monetary Fund warned last week that the world faces a growing risk of a painful recession this year as central bankers in the West raise interest rates and banks stumble.
Tuesday’s gross domestic product report indicates that China, the world’s second largest economy, is coming back to life.
“Quarterly growth is starting to show the hoped-for healthy recovery,” said Louise Loo, an economist specializing in China at Oxford Economics’ Singapore office. “A very decent growth rate of 4.5 percent year-on-year at this early stage of the reopening also leaves room for the government to provide support to weaker segments of the economy as needed.”
China has taken steps to stimulate growth. The government spends on high-speed rail lines, highways, bridges and other infrastructure, money that helps increase jobs and consumers. The central bank, the People’s Bank of China, told commercial banks last month that they could hold slightly less reserves against possible losses, freeing them to lend more.
Growth in the first months of this year was a significant improvement from the 2.9 percent pace in the final quarter of last year, when a wave of illness swept the country in December after pandemic controls were lifted.
Li you contributed research.