China's economy grew at a record pace during the first quarter as it rebounded from a historic contraction caused by Covid-19, and boosted by exports and domestic demand, an AFP poll of analysts found.

The world's number two economy is tipped to have expanded 18.7 percent on-year, according to the average forecast by economists from 15 institutions, having been the only major one to grow at all last year.

While the virus first emerged in central China in late 2019, the country was also the quickest to bounce back after authorities imposed strict lockdowns and virus control measures.

Analysts forecast China's gross domestic product (GDP) growth for the whole year will be 8.5 percent, markedly higher than leaders' modest target of above six percent.

It is also a strident advance from 2.3 percent growth in 2020.

"Monthly indicators released recently all pointed toward a sustained strong recovery in China in the first quarter," said Christina Zhu, an economist at Moody's Analytics.

"Production output grew robustly while both external and domestic demand continued to improve," she said.

The dramatic spike was also largely driven by the low base of comparison with last year, when the outbreak brought most business activity to a standstill, said Rabobank senior economist Raphie Hayat.

The prediction comes after data on Tuesday showed imports and exports continued to boom in March as the nation's recovery continued apace and demand picked up in key overseas markets as they emerged from last year's virus crisis.

This year's Lunar New Year -- typically a period when workers travel across the country to visit family and friends -- also gave a boost to the economic outlook.

China's economy is expected to have expanded at a record pace in the first quarter as the recovery from the virus continues apace
China's economy is expected to have expanded at a record pace in the first quarter as the recovery from the virus continues apace AFP / STR

Many migrant workers heeded authorities' calls to stay put in the cities where they work during the break owing to fears that the annual mammoth migration might lead to coronavirus outbreaks.

This allowed enterprises, especially large ones, to bump up factory output and continue fulfilling orders, said Gene Ma, head of China research at the Institute of International Finance.

And although the country saw some local clusters in the early months of the year, these quickly came under control.

"Domestic demand should gain momentum in March as coronavirus caution recedes and travel and logistics return to 'normal'," said Oxford Economics' lead economist Tommy Wu.

ANZ Research senior China economist Betty Wang said there has also been "buoyant activity" in the period after the Lunar New Year, with rebounding retail sales as local restrictions were lifted and domestic travel increased.

However, the urban unemployment rate rose in February, and some experts have cautioned that the rate is likely to be higher than government figures because of a high number of workers in the casual labourforce, which could weigh on the recovery in future.

While some economists expect growth to slow in the second half of the year, most are bullish about China's prospects -- largely because of the domestic Covid-19 situation.

"Accelerated vaccine distribution will help the services sector to rebound, stabilising the labour market and supporting income growth," said Zhu of Moody's.

"This will in turn speed up domestic demand recovery and prop up production," she said.

A global economic rebound will also fuel demand for China-made goods, she told AFP.

But HSBC chief China economist Qu Hongbin cautioned growth was "likely to slow in the second half of 2021 as property investment is expected to lose steam and the recovery in consumption remains gradual".

Coronavirus