China's GDP reached 24,931 trillion yuan in the first quarter, up 18.3% year on year at comparable prices, according to data released today by the National Bureau of Statistics.That is an increase of 10.3% over the first quarter of 2019 and a two-year average growth of 5.0%.

The economy has maintained a steady recovery

Fixed asset investment recovered steadily.From January to March, the national investment in fixed assets (excluding rural households) reached 9.599.4 billion yuan, up 25.6% year on year and 2.9% on average in the two years. The average growth rate was significantly higher than that in January to February.By sector, infrastructure investment grew by 29.7 percent year-on-year, or 2.3 percent on average over the past two years. The average growth rate in the previous two months was negative.Manufacturing investment increased by 29.8%, with a two-year average decline of 2.0%, which was an improvement over the previous two months.Investment in real estate development increased 25.6 percent, the two-year average growth of 7.6 percent, unchanged from the previous two months.

Consumption growth picked up significantly.From January to March, the total retail sales of consumer goods reached 10,5221 billion yuan, up 33.9% year on year, and the two-year average growth rate was 4.2%.In March, the total retail sales of consumer goods grew 34.2% year on year, and the two-year average growth rate was 6.3%, which was significantly higher than that in January and February.Among the retail sales of goods in the month, the retail sales of automobiles and home appliances increased by 48.7 percent and 38.9 percent year-on-year, respectively, up by 23.6 percent and down by 5.5 percent compared with the same period in 2019.

Foreign demand is strong and exports remain buoyant.From January to March, China's total export value (in terms of US dollars) increased by 49.0% year on year, including 30.6% year-on-year growth in March. Exports of household appliances, automobiles, general machinery and equipment and other products all grew rapidly year on year.Compared with the same period in 2019, the total value of exports in March increased by an average of 10.4 percent in two years.

Industrial production picked up steadily.From January to March, the added value of industrial enterprises above designated size grew by 24.5% year on year, with a two-year average growth rate of 6.8%, which was lower than that in January to February and was related to the high base in March 2019.In March, the added value of industrial enterprises above designated size increased by 14.1% year-on-year in real terms and 0.6% month-on-month.Among them, the added value of the manufacturing industry increased by 15.2% year on year. Among the main steel products, the output of metal cutting machine tools, industrial robots and automobiles all increased significantly.

Infrastructure investment and consumption improved significantly

GDP growth in the first quarter was high year on year, with 0.6% growth in the fourth quarter of last year, lower than the 6.5% growth in the fourth quarter of last year.Among them, production runs at a high level, investment growth is relatively low, consumption compensates strongly, and export maintains a high boom.

In March, the consumption situation improved significantly and boosted the economic recovery.Real estate investment remained stable, but the market was somewhat subdued, the growth of commercial housing sales slowed down, and the average growth rate of new construction space in the past two years remained negative.The momentum of investment in infrastructure increased significantly, with the average two-year growth rate turning from negative to positive.Investment in the manufacturing sector has fallen short of expectations and has not yet recovered to its pre-epidemic level. Businesses are still facing difficulties in their operations and high costs may inhibit their capital expenditure to some extent.

We are on the cusp of an economic recovery

Since the outbreak of the epidemic, the economic recovery has gradually shifted momentum, with real estate investment, infrastructure investment, exports and domestic consumption alternately gaining momentum. At present, exports are high and consumption is strong, but all the momentum will weaken in the second half of the year.In the second quarter, with the epidemic under effective control and the continuous recovery of production and living, the domestic and foreign demand resonates, and the economy has the power to expand. However, with the rise of the base, the economic growth rate will gradually decline from the second quarter.

In terms of investment, the Ministry of Finance issued 1.77 trillion yuan of new special bonds in March, and the issuance peak is expected in the second quarter. With the inertial impact of previous funds, infrastructure investment is expected to maintain recovery.The regulation of the real estate industry is constantly strengthened, new construction and land purchase are affected, the real estate investment gradually wears down its tenacity, growth is under pressure, and may weaken slowly in the later stage;The manufacturing PMI shows that enterprises have high expectations and strong investment drive, but the increased cost pressure has restrained the investment willingness of downstream enterprises, and the manufacturing investment may maintain a moderate recovery.

The normalization of consumption activities and the acceleration of the recovery of service consumption have become the main driving forces for further economic recovery.Recently, two ministries and commissions have launched a new round of new energy vehicles to the countryside, which will drive the steady growth of automobile production and sales. With the arrival of the real estate completion cycle, domestic household appliance consumption is expected to improve.

Overseas economic recovery is accelerating, there is still a gap between supply and demand, China's product exports still have opportunities, March manufacturing new export orders index returned to the boom range, the export will continue the good situation, mechanical and electrical products export is also expected to maintain a high boom.

Steel consumption cautious expansion

In March, the economy recovered steadily and entered the peak season of production and construction. Industrial production maintained a high boom, real estate investment was still not weak, infrastructure investment accelerated significantly, and domestic steel demand maintained expansion.

Strong momentum of economic growth in April, the early stage of the manufacturing PMI index of new orders and construction the new orders index has rebounded, manufacturing production is expected to continue higher sentiment, the toughness, in real estate investment is short-term infrastructure project construction progress is accelerated, and during the steel consumption season, steel demand will continue to good posture, but under the condition of high raw material prices,Downstream cost pressure transmission is not smooth, enterprises production and investment intentions may tend to be cautious, and to a certain extent will inhibit the full release of steel consumption.