Economic growth beats expectations
China’s economy grew faster than expected in the first quarter of the year with help from policies and stronger demand, though signs of weakness in the troubled housing market persisted.
The world’s second-largest economy expanded at a 5.3 per cent annual pace in January-March, beating analysts’ forecasts of about 4.8 per cent, data released Tuesday showed. Compared with the previous quarter, the economy grew 1.6 per cent.
China’s economy has struggled to bounce back from the COVID-19 pandemic but gained momentum late last year as government policies to help the housing market and boost investment took effect.
However, Tuesday’s better-thanexpected data came days after China reported its exports sank 7.5 per cent in March compared with the year before, while imports also weakened. Inflation cooled, reflecting deflationary pressures resulting from slack demand amid a crisis in the property sector.
Investment in property developments fell 9.5 per cent from a year earlier in January-March, compared with a decline of nine per cent in the previous quarter.
“The investment and sales of real estate in the first quarter are indeed not very optimistic. The real estate market is still in a process of adjustment,” Sheng Laiyun, deputy commissioner of the National Bureau of Statistics, told reporters in Beijing. Sheng also acknowledged that while growth was stronger than anticipated, it was uneven. Investment in infrastructure such as roads and bridges rose 6.5 per cent year-on-year after a six per cent increase in the previous quarter.
Fixed investment, in factories and equipment, grew 4.5 per cent compared with the same period a year earlier, up from 4.2 per cent in the previous quarter.
China’s leaders have been trying to recalibrate growth away from investment spending and toward a greater reliance on consumer demand, similar to other major economies. The strong growth in January-March was supported by “broad manufacturing outperformance,” festivities-boosted household spending due to the Lunar New Year holidays and policies that helped boost investments, according to China economist Louise Loo of Oxford Economics.