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China Economic Forecasts and Risk Ratings

Mainland China’s economic growth soared in the first quarter of 2021, owing to continued recovery and extreme low base effect.

Mainland China’s economy continued to recover in the first quarter of 2021. Real GDP surged 18.3% year on year (y/y) in the quarter, up from 6.5% y/y in the fourth quarter of 2020. The first quarter’s growth marked the highest quarterly year-on-year rate of expansion in mainland China’s quarterly GDP data reporting history. The elevated growth was mostly owing to extreme low base effect, as mainland China’s economic output cratered in the first quarter of 2020, owing to the draconian lockdown to contain the COVID-19 pandemic.

Comparing real GDP of the first quarter of 2021 with that of the pre-pandemic first quarter of 2019, mainland China’s economy grew at a more muted rate of 10.3%, or a compound average annual growth rate of 5.0% over the two years. 

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China’s Near-Term Economic Outlook

  • Mainland China’s economy in the first quarter of 2021 grew at a record pace from 2020, owing to continued economic recovery and extreme low base effect.
  • Industrial sector continued to lead the recovery over the service sector on the supply side, as industrial sector activities are less restricted by pandemic control measures. 
  • The supply-demand gap will keep consumer price inflation pressure at bay, despite rising producer price inflation. The unwinding of mainland China’s stimulus measures should also keep inflation under control.

China real GDP growth, percent change from prior year, historic and forecast, 2018Q1-2025Q4 and consumer inflation

Country Risk Rating for China

The Communist Party of China’s (CPC) long-term policy – the “2035 Long-Range vision” – emphasizes the long-term goal of becoming a “modernized socialist society”, as well as “dual circulation”, which places greater emphasis on developing domestic markets and industries. China’s 2021 goals highlight technological innovation as a “core position” in China’s development strategy. The government’s short-term priority continues to focus on the recovery of key livelihood indicators under the “six guarantees” framework while preventing further waves of coronavirus disease 2019 (COVID-19).

A note on our risk ratings: IHS Markit derives country risk ratings for 206 countries, based on six separate ratings in each country: Political, economic, legal, tax, operational and security with 22 detailed sub-aggregate risks. These ratings allow you to quantify risk with greater specificity with a scoring system based on a 0.1-10 logarithmic scale. Seven risk bands, from low to extreme, allow you to compare and contrast risk between countries and regions.


Todd Lee, Ph.D.

Dr. Lee's expertise encompasses an in-depth understanding of China's short-and long-term economic outlook, monetary policy, currency issues and economic reform. He leads a team of economists responsible for global macroeconomic forecasts and analysis, as well as country risk assessments. Dr. Lee has 18 years of experience in economic analysis and forecasting. He joined IHS Markit, now IHS Markit, during the acquisition of Global Insight, where he led both the Greater China Economics Group and Asian Economics Group. Previously, he was a senior economist for Standard & Poor's DRI. He earned his Bachelor of Arts in Economics from the University of California - Irvine, US, and attained his doctoral degree in Economics from Brown University, US. Dr. Lee is fluent in Mandarin Chinese and English.

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Farid Abolfathi, Ph.D.

Dr. Abolfathi's areas of specialization include country risk analysis and macroeconomic forecasting. His research experience in these areas spans more than four decades. He currently heads the Risk Center at IHS Markit where he manages and leads development of various risk services. Dr. Abolfathi currently is responsible for managing three of the company's risk services: the Global Risk Service, the Sovereign Risk Service, and the Banking Risk Service. In addition, he has been part of the international forecasting team of IHS Markit and two predecessor companies. These include Standard & Poor's DRI, a major US economic forecasting organization that became part of Global Insight in 2001, and now is part of IHS Markit. Earlier, Dr. Abolfathi served as senior associate at the Policy Sciences Division of CACI, Inc. from 1974 to 1982, and served as an independent research contractor in Washington, D.C. from 1982 to 1992, as consultant to many US government agencies on economic, defense and foreign policy issues and presented his research findings to intelligence analysts, policy makers and academic audiences.After high school education in London, England, Dr. Abolfathi attended university in the US, attaining a Bachelor of Science from the University of Oregon and both a Master of Arts and a doctorate of Philosophy from Northwestern University.

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Rajiv Biswas

Rajiv previously worked as Director for South-East Asia for The Economist Group. His previous experience includes working for UBS as Executive Director for Asia-Pacific Country Risk and for the Royal Bank of Scotland as an international economist. He has also worked for an international organization, the Commonwealth Secretariat, as a senior economist in the International Capital Markets Department. Rajiv's experience also includes working as a consultant for the United Nations and the Asian Development Bank.Rajiv is a graduate of the London School of Economics, for the B.Sc.Econ.Hons. in Economics, and received his M.Sc. and D.I.C. from Imperial College at London University. Rajiv has published widely on a range of economic, trade and investmentrelated topics, with over 100 published articles. He frequently speaks at international conferences on the global and Asia-Pacific economies, including at World Economic Forum and Euromoney events as well as at United Nations conferences. He regularly appears on international TV programs, including for the BBC, CNBC, Bloomberg, Channel News Asia, CNN and Al Jazeera TV.He is the author of "Future Asia", published by Palgrave Macmillan in 2013, "Asian Megatrends" published by Palgrave Macmillan in 2016 and "Emerging Markets Megatrends" published by Springer/Palgrave Macmillan in 2018.

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