Stability Despite Pressure

China’s GDP grew 4.8 percent year on year in the first quarter (Q1), or 1.3 percent on a trimestral basis. These numbers give a strong indication the economy has been generally stable in its upward trend, said the National Bureau of Statistics on April 18.

A steady job market indicates a sound economy. Despite the pandemic impact, the surveyed urban unemployment rate averaged 5.5 percent in Q1, almost unchanged from the same period last year.

Growing resident income guarantees consumption capacity growth. In Q1, nationwide per-capita disposable income of residents grew by 5.1 percent year on year—after adjusting for inflation. With regard to permanent residence, per-capita disposable income of rural households registered a real growth of 6.3 percent; that for urban households came in at 4.2 percent.

Innovation-driven development continues to be a powerhouse of economic growth. In Q1, the added value of hi-tech manufacturing increased by 14.2 percent, and that of information transmission, software and information technology services rose by 10.8 percent year on year. Green and low-carbon products also maintained rapid growth, with the production of new-energy vehicles soaring 140.8 percent in Q1.

Despite a steady start, China’s economy still faces considerable downward pressures, as demonstrated by the slowdown in several leading economic indicators. For instance, in March, total retail sales of consumer goods fell by 3.5 percent year on year and by 1.93 percent on a monthly basis; imports fell by 1.7 percent.

According to the government work report, China’s GDP is expected to grow by 5.5 percent this year; the Q1 4.8-percent growth was not up to expectations. Affected by trends of unilateralism and trade protectionism and with the ongoing Russia-Ukraine conflict, the global economic environment bears an increasingly bleak outlook. Impacts of domestic COVID-19 resurgences, especially the sudden spread of new cases in Shanghai, may appear in Q2, putting pressure on and posing challenges to China’s future economic growth.

How the Chinese Government will take more powerful measures to continue economic recovery and achieve real results in balancing epidemic control with socioeconomic development and how it will expand domestic demand, alleviate business difficulties and protect the people’s livelihood will be quite the test. BR