China appears to have largely overcome the economic effects of the corona crisis and started 2021 with record growth. The world’s second largest economy grew by 18.3 percent in the first quarter compared to the first three months of 2020. It is the largest increase since the country started tracking its quarterly figures more than 30 years ago.
The unusually strong growth can be explained by the fact that the Chinese economy collapsed early last year due to the corona pandemic. At that time there was a shrinkage of 6.8 percent. At that time, economic activity in the country almost came to a standstill for several weeks.
The Chinese government has a zero-COVID policy. A rigorous lockdown and strict access controls meant that, apart from minor local outbreaks, few new cases have been registered in the last year. Since then, the Chinese economy has been recovering.
The International Monetary Fund (IMF) estimates that the Asian country’s economy could grow by an additional 8.1 percent this year. The Chinese government is more cautious and recently set its official growth target at more than 6 percent at the People’s Congress in Beijing.
Strong foreign trade in particular has boosted the Chinese economy. The Chinese factories produce medical products such as corona tests and protective mouth masks on a large scale, which are exported to other countries. Many laptops and other home working equipment also come from China.