A staff works at a workshop of an organic food company in Qinggang county, northeast China's Heilongjiang province, April 16, 2020. (CHENG ZILONG / XINHUA)

BEIJING - China's economic growth contracted by 6.8 percent in the first quarter, the National Bureau of Statistics (NBS) said on Friday, revealing for the first time the near-term impact of the COVID-19 pandemic on a major economy.

China's gross domestic product stood at 20.65 trillion yuan (about US$2.91 trillion) in the first quarter of 2020, down 6.8 percent year-on-year, NBS data showed.

The country's economic and social development witnessed overall stability in Q1, the NBS said at a press conference, while acknowledging that the COVID-19 outbreak had posed a severe test.

The National Bureau of Statistics said the resumption of work and production has accelerated and fundamental industries are growing steadily

A breakdown of the data showed output of the service sector, which accounted for nearly 60 percent of the total GDP, dropped by 5.2 percent, while primary industry and the secondary industry saw a decline of 3.2 percent and 9.6 percent, respectively.

"The situation of epidemic control and prevention continued to improve with a basic interruption in epidemic transmission at home," the NBS said, adding that the resumption of work and production has accelerated and fundamental industries are growing steadily.

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The country's job market remained generally stable without massive layoffs despite the epidemic, with the surveyed unemployment rate in urban areas in March standing at 5.9 percent, down 0.3 percentage points from the previous month.

Other key economic indicators including fixed-asset investment and retail sales also narrowed decline in March, which analysts believed to have paved the way for continued improvement in Q2 and beyond.

Work and production resumption in March helped pare sharp declines in manufacturing, investment and consumption activities in the first two months when the country prioritized strict containment measures at the early stages of the epidemic, said Wen Bin, a chief researcher with China Minsheng Bank.

NBS spokesperson Mao Shengyong said the economy is expected to perform better in Q2 with accelerated work and production resumption and more stronger policy measures put in place to boost the economy.

Citing a 1.2-percent growth forecast for China's GDP by the International Monetary Fund (IMF), Mao said it would be one of the few positive readings for the world's major economies.

As the IMF predicted the Chinese economy to grow by 9.2 percent next year, the country can expect to achieve an average growth rate higher than 5 percent in the 2020-2021 period, Mao said.

China has yet to announce its annual GDP target for the year, along with other key targets for inflation, unemployment and the fiscal deficit at the "two sessions", the annual meetings of national lawmakers and political advisors that were postponed due to the epidemic.

To further bolster the economy, China has pledged to appropriately raise the fiscal deficit ratio, issue special treasury bonds, increase the scale of special bonds for local governments, and guide the interest rate to decline in the loan market.

The economy possesses growth potential and room for policy adjustments, and the trend of continued recovery is expected for Q2 and the second half of 2020, said Wen. 

Industrial output

China's value-added industrial output, an important economic indicator, fell 8.4 percent in the first quarter of this year, as the outbreak deals a huge blow to industrial production, NBS data showed.

Output by the manufacturing industry went down 10.2 percent, while the production and supply of electricity, thermal power, gas and water reported a year-on-year decrease of 5.2 percent.

The mining sector saw output down by 1.7 percent in the period.

China's value-added industrial output, an important economic indicator, fell 8.4% in the first quarter of this year, data showed

In a breakdown by ownership, the output of state-controlled enterprises went down 6 percent, that of joint-stock companies down 8.4 percent, and that of overseas-funded enterprises dropped by 14.5 percent.

In Q1, output by the private sector went down 11.3 percent year-on-year.

The industrial output is used to measure the activity of designated large enterprises with annual business turnover of at least 20 million yuan (about US$2.82 million). 

In March, the industrial output edged down 1.1 percent year-on-year, shrinking by 12.4 percentage points from the drop in the first two months and nearing the level logged in the same period of last year, Mao said.

Sixteen of the 41 sectors monitored by NBS recorded increasing output in March, with high-tech manufacturing maintaining fast expansion.

High-tech manufacturing sector saw a year-on-year increase of 8.9 percent last month, while the output of industrial robots climbed 12.9 percent from a year earlier.

Around 40 percent of over 600 major industrial products monitored by the NBS saw year-on-year increase in output, revealing that the restoration of industrial production had achieved obvious results, Mao said.

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Fixed-asset investment

China's fixed-asset investment declined 16.1 percent year-on-year to 8.41 trillion yuan (about US$1.19 trillion) in the same period, the NBS said.

The fall narrowed by 8.4 percentage points compared with the decrease in the first two months.

Fixed-asset investment in March went up 6.05 percent from February.

In breakdown, fixed-asset investment in the primary industry dropped 13.8 percent year-on-year in the first quarter, while that in the secondary and tertiary industries went down by 21.9 percent and 13.5 percent, respectively, according to the NBS. 

Fixed-asset investment declined 16.1% year-on-year to 8.41 trillion yuan (about US$1.19 trillion), the NBS said

The decline in the three industries narrowed by 11.8 percentage points, 6.3 percentage points and 9.5 percentage points, respectively in the first quarter comparing with the fall in the first two months.

Private investment decreased 18.8 percent to 4.78 trillion yuan during the period, and investment in high-tech industries dropped 12.1 percent in the first quarter, NBS data showed.

Investment in high-tech manufacturing and services fell 13.5 percent and 9 percent in the same period, respectively.

Fixed-asset investment includes capital spent on infrastructure, property, machinery and other physical assets. 

The National Development and Reform Commission, China's top economic planner, approved 19 fixed-asset investment projects with combined investment totaling 185.3 billion yuan in the first two months of the year.

The projects are mostly related to transportation and the new and high-tech industries, according to the commission. 

Retail sales

China's retail sales of consumer goods, a major indicator of consumption growth, declined 19 percent year-on-year in the first quarter of this year, the NBS said.

The figure slightly rebounded from a drop of 20.5 percent in the first two months, NBS data showed.

In March, retail sales of consumer goods reached 2.645 trillion yuan (about US$374 billion), down 15.8 percent year-on-year.

Retail sales in rural areas dropped 17.7 percent year-on-year in Q1, while that in urban areas decreased 19.1 percent.

Retail sales of consumer goods, a major indicator of consumption growth, declined 19% year-on-year, the NBS said

The decline came as efforts to curb the spread of COVID-19 have kept most people across China indoors, as well as shops and restaurants shut during the past three months.

Revenues of the catering sector, one of the worst-hit industries, fell 44.3 percent compared with the same period last year, said the NBS.

Meanwhile, online sales stayed relatively stable as consumers turned to online services when staying indoors, falling 0.8 percent year on year. Online sales of physical goods expanded 5.9 percent to 1.85 trillion yuan, accounting for 23.6 percent of the total retail sales in the first quarter.  

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The consumer market has showed signs of recovery amid measures introduced to revive consumer confidence. Growth of sales revenue at 5,000 major retailers rose 15.8 percentage points in March compared with that of February, and further improved into April, the Ministry of Commerce said Thursday.

The auto sector also warmed up in March. Automobile output jumped almost 400 percent last month from February, while sales surged 361.1 percent month on month, data from the China Association of Automobile Manufacturers showed.

Disposable income

China's per capita disposable income stood at 8,561 yuan (about US$1,211) in the first quarter, up 0.8 percent year-on-year in nominal terms, NBS data showed.

China's per capita disposable income rose 0.8% to 8,561 yuan (about US$1,211) in the first quarter, data showed

After deducting price factors, the per capita disposable income fell 3.9 percent year-on-year, according to the NBS.

Separately, urban per capita disposable income came in at 11,691 yuan, up 0.5 percent in nominal terms and down 3.9 percent in real terms, while income in rural areas stood at 4,641 yuan, up 0.9 percent in nominal terms and down 4.7 percent in real terms.

Friday's data also showed Chinese per capita nominal consumer spending fell 8.2 percent year on year to 5,082 yuan in the first quarter. After factoring in price levels, spending went down 12.5 percent year-on-year as the novel coronavirus outbreak dented demand.

Property investment

China's investment in property development declined 7.7 percent year-on-year in the first quarter of 2020, narrowed from the 16.3-percent drop in the first two months, the NBS said.

Investment in property development declined 7.7% year-on-year, totaling 2.2 trillion yuan (about US$311 billion), the NBS said

The total property investment during the period stood at 2.2 trillion yuan (about US$311 billion), the NBS said.

The investment in residential buildings went down 7.2 percent year-on-year to 1.6 trillion yuan in Q1, 8.8 percentage points slower than the decline in the first two months.

Commercial housing sales in terms of floor area totaled 219.78 million square meters from January to March, down 26.3 percent year-on-year, 13.6 percentage points slower than the Jan-Feb drop.

In the first three months, commercial housing sales in terms of value fell 24.7 percent to 2.04 trillion yuan, narrowed by 11.2 percentage points comparing with the decrease in the first two months.