Expectations Slightly Improved

In the April 2021 survey (6–14 April 2021), the CEP indicator climbed 3.5 points to a new value of 46.3 points. The CEP indicator, based on the China Economic Panel (CEP) and conducted by ZEW Mannheim in cooperation with Fudan University, Shanghai, reflects the economic expectations of international financial market experts for China on a 12-month basis.

The assessment of the current economic situation in China dropped slightly by 0.3 points to a new reading of 42.6 points. The economic outlook for China thus continues to be very positive.

The forecasts for real gross domestic product (GDP) for the current year as well as for 2022 have been significantly revised upwards. The new GDP forecast for 2021 is 6.8 per cent, up from 6.0 per cent in the previous month. For 2022, the forecast was raised to a somewhat lesser extent, from 5.2 per cent to 5.6 per cent.

This change in forecast comes at the same time as the announcement of GDP growth in the first quarter of 2021. Compared to the same quarter last year, China’s National Bureau of Statistics reports a significant increase of 18.3 per cent. “However, this increase should not be over-interpreted, as we all know that China experienced an economic slump one year ago,” says Dr. Michael Schröder, who coordinates the survey in ZEW’s Research Department “International Finance and Financial Management”. In contrast, the quarter-on-quarter growth rate is all the more revealing. Compared to the fourth quarter of 2020, growth was only 0.6 per cent. This shows that economic growth has weakened in the course of the past few quarters. “It therefore remains to be seen whether the high quarterly growth rates from the second to fourth quarters of 2020 will be achieved again in 2021,” Schröder continues.