China’s Q1 GDP growth likely to slow, more stimulus on cards
The People’s Bank of China has pledged to step up policy support this year
China’s economy is expected to have slowed in the first quarter as a protracted property downturn and weak privatesector confidence weigh on demand, maintaining pressures on policymakers to unveil more stimulus measures.
Data on Tuesday is forecast to show gross domestic product (GDP) grew 4.6 per cent in JanuaryMarch from a year earlier, slowing from 5.2 per cent in the previous three months and hitting the weakest since the first quarter of 2023, according to a Reuters poll.
AMBITIOUS TARGET
The world’s secondlargest economy has struggled to mount a strong and sustainable postCovid bounce, burdened by a protracted property downturn, mounting local government debts and weak privatesector spending.
The government has set a target of around 5 per cent for this year, which has been described by most analysts as ambitious, partly because last year’s growth rate of 5.2 per cent was likely flattered by a comparison with a Covidhit 2022. The economy was off to a solid start this year, fanning optimism among some analysts for an improved 2024 outcome, but March data on exports, consumer inflation and bank lending showed that momentum could falter again and policymakers may need to launch more stimulus to spur demand. On a quarterly basis, the economy is forecast to expand 1.4 per cent in the first quarter, quickening from 1.0 per cent in OctoberDecember, the poll showed.
GDP data is due on Tuesday. Separate data on March activity is expected to show both industrial output and retail sales slowing. For 2024, the economy is expected to grow at a subdued 4.6 per cent pace yearonyear, the poll showed, falling short of the official target of around 5.0 per cent. Last week, Fitch cut its outlook on China’s sovereign credit rating to negative, citing risks to public finances as Beijing channels more spending towards infrastructure and hightech manufacturing, amid a shift away from the property sector.
The government is drawing on infrastructure work a wellused playbook to help lift the economy as consumers are wary of spending and businesses lack confidence to expand.
China has set the 2024 quota for local government special bond issuance at 3.9 trillion yuan ($538.79 billion), up from 3.8 trillion yuan last year. Beijing also plans to issue 1 trillion yuan in special ultralong term treasury bonds to support some key sectors.
The PBOC might include the buying and selling of treasury bonds in its policy tool reserve in future, Financial News a publication backed by the central bank quoted experts as saying last week.
Apple’s smartphone shipments dropped about 10 per cent in the first quarter of 2024, hurt by intensifying competition by Android smartphone makers aiming for the top spot, according to data from research firm IDC.
Global smartphone shipments increased 7.8 per cent to 289.4 million units during JanuaryMarch, with Samsung, at 20.8 per cent market share, clinching the top phonemaker spot from Apple.
MARKET SHIFT
The iPhonemaker’s steep sales decline comes after its strong performance in the December quarter when it overtook Samsung as the world’s No.1 phone maker. It’s back to the second spot, with 17.3 per cent market share, as Chinese brands such as Huawei gain market share. Xiaomi occupied the third position with a market share of 14.1 per cent during the first quarter.
Samsung, which launched its latest flagship smartphone lineup — Galaxy S24 series — in the beginning of the year, shipped more than 60 million phones during the period.
Global sales of Galaxy S24 smartphones jumped 8 per cent, compared to last year’s Galaxy S23 series during their first three weeks of availability, data provider Counterpoint previously said.
In the first quarter, Apple shipped 50.1 million iPhones, down from 55.4 million units it shipped same period last year, according to IDC.
CHINA MARKET
Apple’s smartphone shipments in China shrank 2.1 per cent in the final quarter of 2023 from a year earlier. The drop underscores the challenges facing the US firm in its third biggest market, as some Chinese companies and government agencies limit employees’ use of Apple devices, a measure that mirrors U.S. government restrictions on Chinese apps on security grounds.
The Cupertino, Californiabased company in June will hold its Worldwide Developers Conference (WWDC), where it will highlight updates to the software powering iPhones, iPads, and other Apple devices.
Investors are closely watching for updates on artificial intelligence development at Apple, which has so far spoken little about incorporating the AI technology into its devices. The company earlier this year lost the crown as the world’s most valuable company to Microsoft.