Economy grew 5.3% in first quarter
HONG KONG » China’s economy grew f aster than e xpected 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 s econdlargest economy expanded at a 5 .3% annual p ace in January- March, beating analysts’ forecasts of about 4.8%, data released Tuesday showed. Compared t o the previous quarter, the economy grew 1.6%.
China’s economy has struggled to bounce back from t he C OVID- 19 pandemic but gained momentum late l ast year a s government policies to help the housing market and boost investment took effect.
However, Tuesday’s betterthan- expected data came days after China reported i ts e xports s ank 7.5% in March compared to the year before, while imports also weakened. Inflation cooled, reflecting deflationary pressures resulting from slack demand amid a crisis in the property sector.
Investment i n property developments f ell 9.5% from a year earlier in JanuaryMarch, compared with a decline of 9% in the previous quarter.
“The i nvestment and sales of r eal estate i n the first quarter are indeed not very optimistic. The real estate market is still in a process of adjustment,” Sheng Laiyun, deputy c ommissioner of the National Bureau of S tatistics, t old reporters in Beijing.
Sheng also a cknowledged that w hile g rowth was stronger t han anticipated, i t was uneven. Investment in infrastructure such as roads and bridges rose 6.5% year over year after a 6% increase in the previous quarter.
Fixed investment, in factories and equipment, grew 4.5% compared to the same period a year e arlier, up from 4.2% 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.
Whi le retai l s ales climbed 4.7% i n JanuaryMarch, growth in March was only 3.1% year- on- year.
“Looking a t the degree of recovery, we have found that t he r ecovery of c onsumption is not as good as production, and the recovery of small and mediumsized enterprises is not as good as that of large enterprises, so there is a clear imbalance in the economic recovery,” Sheng said.
Industrial output for the first quarter was up 6 .1% compared to the same time last y ear, b ut i t rose o nly 4.5% in March.
The strong growth in JanuaryMarch was supported by “broad manufacturing outperformance,” f estivitiesboosted household spending due to the Lunar New Year holidays and policies that helped boost investments, a ccording to China economist Louise Loo of Oxford Economics.
“However, ‘ standalone’ March activity i ndicators suggest weakness coming through post- Lunar N ew Year,” s he s aid. “External demand conditions also remain unpredictable, as seen in March’s sharp export underperformance.”
Loo noted that an unwinding of excess inventory, normalization of household spending after the holidays and a cautious approach to government spending and other stimulus w ill affect growth in this quarter.
Policymakers h ave unveiled a r aft of fiscal a nd monetary policy measures as Beijing seeks to boost the economy. China has set an ambitious gross domestic product ( GDP) growth target of about 5% for 2024.
Such s trong growth usually would push share prices across the region higher. But on T uesday, Asian shares fell sharply after stocks retreated on Wall Street.
The Shanghai Composite index lost 1.47% and the Hang Seng in Hong Kong lost 2.1%.