China entered 2021 with cause for optimism as the country fared better than most during the pandemic and reported economic growth in 2020. However, to caveat, most of China’s gross domestic product (GDP) growth in 2020 can be attributed to the country resorting to former engines of growth such as gross capital formation (i.e. public infrastructure investment), while other sources of growth such as private consumption took a back seat as firms and households reeled from pandemic-induced  nterruptions. Fortunately, there have been signs that household consumption may be recovering, and although coming from a low base of comparison, the record GDP growth in the first quarter of 2021 affirms China’s recovery. With the economy recovering, the government will probably want to focus on supporting more sustainable drivers of growth. Interventions from monetary and fiscal policy will also be more targeted and direct, reining in risk at the same time.