China’s economy expanded 18.3 per cent in the first three months of 2021, its fastest year-on-year rate for any quarter on record, highlighting the extent to which the country has rebounded from the coronavirus pandemic.

Gross domestic product growth, which was marginally below expectations, was so unusually high because it was compared with a period in which the economy suffered a contraction for the first time in decades.

The data nonetheless underscored the rapid pace of recovery in China, where a frenzy of industrial activity and low Covid-19 infection rates combined to push growth above pre-pandemic levels by the end of last year, and far beyond the performance of other big economies.

“Generally speaking, the national economy in the first quarter presented continued momentum of stable recovery,” China’s National Bureau of Statistics said in a statement.

“However, we must be aware that the Covid-19 epidemic is still spreading globally and the international landscape is complicated with high uncertainties and instabilities.”

The sharp jump in the first quarter, which was far higher than in any period since quarterly reporting began in the early 1990s, was again supported by industrial production. The metric added 24.5 per cent in the first quarter and alongside booming exports has helped prop up growth over the past year, though it missed expectations in March and only rose 14.1 per cent year-on-year.

The expansion was also supported by household consumption, which had previously lagged behind the wider recovery but is expected to play a greater role in driving growth this year. Retail sales beat expectations to add 34.2 per cent in March, rebounding from a period of lockdowns a year earlier.

Focus in China has shifted to the prospect of rate rises, with signs of overheating across parts of the economy despite persistently low consumer price inflation. The government is trying to curb leverage across its property sector, as well as rein in record rates of steel production following a construction boom. 

Several high-ranking officials have warned about the risks of high asset prices in recent months. Guo Shuqing, China’s top banking regulator, said in March that the country was exposed to “bubbles” in international markets and its own real estate sector. 

The Chinese stock market hit an all-time high in February, but has since lost 15 per cent. Following the release of the data on Friday morning, the country’s CSI 300 index of Shanghai- and Shenzhen-listed stocks was up 0.1 per cent.

The Chinese recovery from the pandemic has also helped it dominate global trade, with exports rising every month since June last year. In March, exports added 30 per cent in dollar terms compared with the same month a year earlier.

Fixed asset investment rose 25.6 per cent in the first quarter. The urban unemployment rate was 5.3 per cent.

Additional reporting by Xinning Liu in Beijing