What's going on?

New data out on Friday showed the Chinese economy grew at its fastest pace on record last quarter, proving that this apparently unbeatable pandemic is anything but.

What does this mean?

The world�s second-biggest economy grew 18% compared to the same time last year. And sure, most of the Chinese economy was shut down in the first quarter of 2020 because of the coronavirus outbreak. And sure, the pandemic�s lingering effects were noticeable in the numbers, with China�s manufacturing industry � which makes up 38% of its economy � growing slower than expected. But that drop-off was more than offset by the 34% rise in retail sales, which has put China on course to smash its annual growth target of 6%. Fatality!

Why should I care?

For markets: The big just got bigger.
The International Monetary Fund (IMF) � a major international economic organization � actually reckons China�s economic growth will go back to pre-pandemic levels this year, hitting as much as 8.4%. That tallies with the consensus that China and the US will drive the global rebound in 2021, with the latter�s economy projected to grow by a tidy 6.4%. That should come as a relief to investors, who are hoping strong economic growth will make sure this stock market rally just keeps rallying.

The bigger picture: Can�t we all just get along?
While the two biggest economies are expected to lift global growth, their tech war � recently escalated by the US�s decision to blacklist seven Chinese supercomputing firms � could do the exact opposite. In a research report out on Friday, the IMF said the US and China�s unwillingness to share tech could cut as much as 5%�off the economic output of various countries around the world (tweet this). That�d be more than 10 times the damage their existing trade tariffs are estimated to have done�