All of China’s provincial-level areas, except the Tibet Autonomous Region, which has yet to report its figures, recorded double-digit GDP growth of more than 12% in the first quarter. The robust growth rates across the country further underscored a full-fledged recovery of the Chinese economy from the Covid-19 pandemic, with most industries returning to or exceeding pre-pandemic levels. However, the growth pace may slow to normal levels in the second half of the year, an economist warned. Among the 30 provinces, autonomous regions and municipalities that have released their growth figures, eight provinces recorded growth above the national average of 18.3%, led by Hubei province, the province hit hardest by the Covid-19 virus in 2020. Hubei’s GDP grew 58.3% in the quarter. Tibet is also expected to post double-digit growth.  

Based on a two-year average, Hainan province was first with a 7% growth, driven by new services and retail sectors. Hainan was followed by Guizhou, Jiangxi and Jiangsu provinces. The double-digit growth rates are mostly due to an extremely low base last year, according to Tian Yun, Vice Director of the Beijing Economic Operation Association. With the effective containment of the pandemic, conditions in many industries, including manufacturing, retail and catering, have returned to levels that are near to or exceed pre-pandemic figures. “In the first quarter, there was a fast recovery not only on the supply side, but also in domestic demand, driving up manufacturing as well as retail and catering,” Tian said.

In Guangdong, the contribution of whole-sale, retail, lodging and catering to local GDP growth rose by 51.3% compared to last year. Foreign trade in several provinces drove accelerated economic growth in the first quarter. In Hubei, foreign trade surged 88.1% to CNY117.46 billion. Shandong’s foreign trade grew by almost 39%, and Guangdong’s bonded imports and exports grew by 27.8%. However, Tian warned that growth might peak in the first half of this year and then gradually slow from the third quarter, as domestic and overseas demand stabilizes, the Global Times reports. 

Wu Chaoming, Chief Economist at Chasing Securities, however added that northern and northeastern provinces have been lagging in their recovery as their economies are heavily reliant on traditional industries, leaving them in an inferior position in the ongoing recovery led by high-tech industries. “The export-driven recovery in industrial output has been a key pillar of China’s economic recovery since the second quarter of last year. This is partly why coastal provinces like Guangdong, Jiangsu and Zhejiang are doing better than the nationwide level in spite of their large economic scale,” Wu added. Guangdong had the largest economic scale of all regions in the first quarter with CNY2.71 trillion worth of gross regional output, up 18.6% year-on-year. The gross regional output of seven other provinces – Jiangsu, Shandong, Zhejiang, Henan, Sichuan, Fujian and Hunan – also exceeded CNY1 trillion in the first quarter.

Profits of China’s major industrial firms maintained fast expansion in the first quarter this year as the Chinese economy continued its recovery and enterprises’ production and sales further restored growth. Industrial firms with an annual business turnover of at least CNY20 million raked in CNY1.83 trillion in combined profits during the first three months, surging 137% year-on-year, according to the National Bureau of Statistics (NBS). The figure rose 50.2% compared with the same period in 2019. The fast expansion also put average first-quarter growth for 2020 and 2021 at 22.6% compared to the 2019 level. In March alone, profits of major industrial firms jumped 92.3% year-on-year to CNY711.18 billion. Previous data showed that China’s value-added industrial output went up 24.5% year-on-year in the first quarter, laying a sound foundation for the improvement of enterprises’ profitability. Profits in almost all industrial sectors increased during the period compared to a year ago, with nearly 40% of sectors doubling their profits. A total of 30 industrial sectors logged increases in profits compared with the first quarter of 2019. Auto manufacturing profits skyrocketed 843%, and profits from computer, communication and electronic equipment manufacturing rose by 141%.

China’s use of foreign capital rose by 43.8% year-on-year to USD44.86 billion in the first quarter of this year, according to the Ministry of Commerce (MOFCOM).

This overview is based on reporting by the China Daily, Shanghai Daily and Global Times.