‘Zero Covid’ Behind It, China’s Economy Starts to Recover
Economic growth began to recover in China during the first three months of the year, after the government abruptly lifted stringent “zero Covid” measures in early December.
The Chinese economy grew 4.5 percent from January through March compared with the same months last year, the country’s National Bureau of Statistics said Tuesday. Strong retail sales, up 10.6 percent in March from a year earlier, 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 United States, and growing disagreements with Europe, China remains highly interdependent with both of their economies. The International Monetary Fund warned last week that the world faces an increasing risk of a painful slowdown 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.
“The quarterly growth is beginning to show a hoped-for healthy rebound,” said Louise Loo, an economist specializing in China in the Singapore office of Oxford Economics. “A very decent 4.5 percent year-over-year growth pace at this early stage of the reopening also provides the space for authorities to provide support to weaker segments of the economy as needed.”
China has taken steps to stimulate growth. The government is spending on high-speed rail lines, highways, bridges and other infrastructure, money that helps boost jobs and consumers. The central bank, the People’s Bank of China, told commercial banks last month that they could hold slightly smaller reserves against possible losses, freeing them to lend more.
Growth in the first months of this year was a considerable improvement from the 2.9 percent pace in the final quarter of last year, when a wave of illness swept across the country in December after pandemic controls were lifted.
Li You contributed research.
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