China has recorded its fastest annual economic growth on record, its latest GDP figures have revealed.
Its economy expanded 0.6 per cent in the March quarter after growing 3.2 per cent in the December quarter.
GDP grew at a record 18.3 per cent annualised rate in the March quarter compared to a year ago when the world came to a standstill as a result of COVID-19.
Additionally, Chinese citizens have been hitting the shops, retail sales grew at an annual rate of 34.2 per cent as new jobs were created with the unemployment rate fall from 5.5 per cent to 5.3 per cent.
All round, the Chinese economy is going absolutely gangbusters.
What does this actually mean?
CommSec senior economist Ryan Felsman said the Chinese economy has rebounded sharply since the world was plunged into the deepest economic slump in decades.
“At the height of the COVID-19 crisis, China’s GDP contracted 6.8 per cent in the first three months of 2020,” Felsman said.
“The economic snap-back has been breath-taking with China the only major economy to record positive annual GDP growth in 2020 (up 2.3 per cent).”
However, despite the positive result, Felsman said China’s economy is still not as strong as it used to be, saying the data is somewhat distorted due to the economic halt experienced last year.
“It was still the weakest growth rate in 44 years, reflecting the impact of government COVID-19 restrictions,” he said.
“And recent outsized annual growth rates are largely distorted by the economic shutdown a year ago.”
What China’s data means for Australia
Overall, the data is an encouraging sign, given Australia’s economic reliance on China. With export orders returning to growth, Australia is poised to reap the benefits.
“China is Australia’s largest trading partner and changes in the Chinese economy have major implications for the Aussie economy,” Felsman said.
“China continues its ‘V’-shaped economic recovery benefitting our bulk commodity exporters. In fact, iron ore exports from Port Hedland in Western Australia jumped to 46.7 million tonnes in March, pointing to robust demand in China.”
Pre-pandemic China bought around 32 per cent of all Australian exports adding up to $153.2 billion.
And, analysis from Oxford Economics explained we can expect the good times to keep on rolling so long as any shipping delays don’t cause too much trouble, and the world recovers as a whole.
“Global shipping delays could overshadow the near-term export outlook. But positively, new export orders picked up again ... after falling temporarily in February,” Oxford Economics said in a note.
“We think that a strong global economic recovery should underpin China’s exports through 2021, despite the likely retreat of pandemic-related demand (for personal protective equipment, computers, and laptops) later this year.”