N. Peter Kramer’s Weekly Column
In the first quarter of 2021 China’s economy continued its strong recovery from coronavirus as the country reported a record growth rate compared to last year. Output leapt 18,3 percent in the first three months, the fastest rise since beginning of the nineties. The official figures highlight the rapid recovery that has unfolded across China’s economy since the first quarter last year. The record first-quarter growth has already shifted the focus to ‘overheating’ and the prospect of rate rises in China.
China benefited from being the first big economy to emerge from lockdown, although the US is catching up. It is on track to regain its pre-pandemic output level before the end of the first half year 2021. A sign that the pre-pandemic growth of the US economy during Trump’s presidency is back, boosted by President Biden’s unprecedented $1.9 trillion stimulus.
In strong contrast with the US and China, EU economies have been set back this year. The Eurozone shrank by 0,6% in the first quarter, the second consecutive extraction. It is the second such episode, a so called double-dip recession, since the onset of the pandemic. Its GDP is not expected to return to pre-pandemic levels at the mid-2022.
There is an EU recovery fund of €750 billion, but until now only 14 of the 27 member states showed their interest in it. And in the meantime the EU institutions are busy with the preparations for the Conference on the Future of Europe (read: the EU); a ‘one year citizen-based consultation doomed from the start’ as Giles Merritt, Founder of Friends of Europe, recently stated.