Chinese GDP: five things to see
China’s National Bureau of Statistics will release on Friday its first-quarter gross domestic product growth as the Covid-19 pandemic halts the world’s second-largest economy and banners are expected in a year.
The country had a historical history of years contraction nearly 7 percent in the first quarter of 2020, setting the stage for a huge rebound this year.
Exports in March were the latest examples of this “low-base” effect, rising more than 30 percent from the same month last year when China was blocked from having the coronavirus.
Here are five things to keep in mind for Friday’s premiere.
How much will the first quarter bounce be?
China’s chief economist Larry Hu Macquarie says first-quarter economic outflow is on track [expand] 18 ”per year.
But that push to “get into the pandemic first, first” will slow down by 2021. The Chinese economy grew by 6.5 percent in the fourth quarter and 2.3% year-on-year – it is the only major economy to expand in 2020.
Prime Minister Li Keqiang announced it for the whole year the goal of growth “At least 6 percent,” at the annual session of the National People’s Congress (China’s rubber stamp parliament) held in Beijing last month.
Why not a higher goal?
Chinese financial officials, head Liu HeThe deputy minister and the country’s most powerful financial official are keen to control some of the measures that hardened the economy but reversed the success of stabilizing China’s overall debt level.
Liuren’s team is aiming to restore financial discipline. It has refused to take the “helicopter money” released by major Western economies, such as the US, and other measures in favor of demand.
The severity of their intentions was highlighted in February, when the People’s Bank of China secretly ordered domestic and foreign lenders to maintain the first quarter. growth in new loans flat compared to the same period last year.
Will they get it?
Giving dictates to the banking system controlled by the Chinese state is often ineffective, even for powerful officials like Liu.
President Xi Jinping said “the houses are for living, not for speculation,” and for the Chinese the main regulatory bank he noted that the property sector is the largest “gray rhino” for economic stability.
But the country property boom it has not diminished. Real estate investment and loan growth grew by 38 percent and 14 percent year-on-year in January and February, respectively.
Steel production also rose by 6% to a record 1.1 billion tonnes last year. In the spring, the government’s efforts to control the sector, which has increased the level of air pollution in northern China, have led to higher prices, which has led to more production.
Will consumption and services bounce back?
Last year, China’s impressive economic recovery was driven by growth in industrial production, while retail sales remained relatively weak. The services sector also had the weight of the pandemic.
This is contrary to what Beijing would like to see, as the economy tries to balance credit from fueled industrial activity to consumption. But that’s going to be very difficult. China has recorded a consumer price deflation in November 0.5 percent for at least 10 years for the first time.
What other limitations does Beijing have in trying to control the recovery?
Xi’s administration does not want to put a hard brake on the centenary of the founding of the Communist Party of China on July 1.
The “party” will do “what it needs” to prevent a downturn in the economy or a bad stock market crash [the] celebrations, “Diana Choylevak told Enodo Economics.” After that, the importance of reducing China’s debt burden will create tighter policy and liquidity conditions. “
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