China reported year-over-year GDP growth of 18.3 percent for the first quarter of 2021, driven by a surge in exports as foreign residents continue to buy Chinese goods.
However, China’s economy grew by just 0.6 percent compared with the previous quarter, pointing to issues in the country’s domestic market.
“The domestic economic recovery is not yet solid,” Liu Aihua, a spokeswoman for China’s National Bureau of Statistics, told reporters on Friday. Despite this, “the continued economic recovery as well as improving labor income and job market will further lift China’s consumption.”
Consumers in other nations have sought out various Chinese-made goods during the pandemic, including medical supplies and electronics to help with working from home. At the same time, certain sectors in China’s economy struggled to rebound from challenges during the pandemic.
The number of migrant workers traveling to cities for work fell by 2.5 million compared to pre-pandemic levels, pointing to a slow recovery in China’s service sector. Additionally, the jobless rate for citizens ages 16 to 24 was 13.6 percent at the end of the first quarter, higher than China’s urban unemployment rate of 5.3 percent.
China has attempted to keep coronavirus outbreaks at bay through stringent lockdowns, in some cases closing entire cities to prevent spread of the illness. The strategy may have had a detrimental effect on the country’s service sector.
“China’s Covid strategy has been to crush it when it reappears, but there seems to be a lot of voluntary social distancing, and that’s affecting services,” Shaun Roche, chief economist for Asia Pacific at S&P Global, told the New York Times. “It’s holding back normalization.”
Around 6.4 percent of residents were vaccinated as of April 15, according to Bloomberg‘s global vaccine tracker.