BUSINESS Hubei GDP skyrockets 60% in Q1 as economy starts to pick up after lockdown


Hubei GDP skyrockets 60% in Q1 as economy starts to pick up after lockdown

Global Times

21:27, April 19, 2021

Tourists view blooming cherry blossoms at the Moshan scenic spot by the East Lake in Wuhan, central China's Hubei Province, March 11, 2021. (Photo: Xinhua)

Central China's Hubei Province, the first province in China clobbered by the COVID-19 outbreak, reported first-quarter GDP expansion of nearly 60 percent this year, recovering from a 40-percent plunge in the same period of 2020, according to official statistics released on Monday.

In the first quarter, GDP rose 58.3 percent to reach 987.27 billion yuan ($151.4 billion). The secondary sector expanded 88.9 percent year-on-year, while the services sector grew by 45.7 percent. Primary industry, which didn't grow at all last year, expanded 24.9 percent in the first quarter of this year.

Hubei's economy was crushed by the sudden epidemic outbreak for the first quarter of 2020 with a contraction of 39.2 percent, mostly due to a 76-day strict lockdown that paralyzed local businesses. Almost every sector except mining, natural gas and oil shrank in the first quarter last year.

For all of 2020, Hubei's economy contracted 5 percent to 4.34 trillion yuan. But all major indicators have recovered swiftly, and consumption returned to growth in December.

Graphics: GT

"The key is that the effective and swift containment of the virus meant that consumption ability has remained intact in Hubei, and it was unleashed as soon as the businesses got back to normalcy," Tian Yun, vice director of the Beijing Economic Operation Association, told the Global Times.

"The rapid recovery in consumer spending, as well as the return to normal operations by most manufacturers, made the V-shaped stellar recovery possible in Hubei," Tian said. "If a strict lockdown drags on for a long time, it will cause long-term unemployment and damages that will be hard to recover."

In the first quarter of 2021, Hubei's retail sales rose 62.7 percent to reach 478.28 billion yuan, compared with a 44.9 percent drop in the first quarter of last year.

Liu Xiaoting, general manager of Dahankou, a local brand of instant hot dry noodle business, told the Global Times that things have improved dramatically this year, compared with the beginning of 2020 when the company was shut completely.

"We suffered huge economic losses when our factories were ordered to shut down earlier last year, but as the draconian lockdown began to ease, our orders resumed very fast, both online and in our physical stores," Liu said.

Profits began to offset lockdown-related losses as early as last April, when orders started to increase.

The province is expecting a strong economic comeback following the effective containment of the coronavirus. Hubei has set its GDP growth target for 2021 at more than 10 percent, as announced in a local government work report, while many experts predict that the province could attain its GDP growth of more than 15 percent.

Ye Qing, a professor at the Zhongnan University of Economics and Law in Wuhan, told the Global Times on Monday that the 58.3-percent GDP growth rate in the first quarter this year demonstrated that the province has "completely emerged from the impact" of COVID-19 and everything has returned to normal.

"The full year of 2021 will show a high start with a low end for Hubei's GDP growth rates, since economic resumption began quickly picking up in the second half of last year, creating a higher base," said Ye.

He forecast the growth rate would hover at 20 percent for the second quarter this year.

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