NBS data point to strong econ­omy

China Daily - - FRONT PAGE - By XIN ZHIMING xinzhim­ing@chi­nadaily.com Wang Yan­fei con­trib­uted to this story.

In­di­cat­ing the Chi­nese econ­omy re­mained re­silient at the start of the year, the na­tion’s GDP reg­is­tered solid growth in the first quar­ter, ex­pand­ing by 6.8 per­cent year-on-year, the Na­tional Bu­reau of Sta­tis­tics said on Tues­day.

GDP reached 19.88 tril­lion yuan ($3.17 tril­lion) in the first three months.

“The econ­omy is off to a good start,” NBS spokesman Xing Zhi­hong said at a news con­fer­ence. “The na­tional econ­omy has main­tained sta­ble de­vel­op­ment mo­men­tum.”

The GDP growth rate has been within the range of 6.7 per­cent to 6.9 per­cent for straight 11 quar­ters, with the job­less rate re­main­ing at low lev­els.

The NBS data showed that re­tail sales helped shore up sta­ble growth, climb­ing by 9.8 per­cent in the first quar­ter.

Fixed-as­set in­vest­ment in­creased by 7.5 per­cent in the same pe­riod, down by 0.4 per­cent­age point from the Jan­uary-Fe­bru­ary pe­riod.

In­dus­trial out­put growth reached 6.8 per­cent in the first quar­ter, down by 0.4 per­cent­age point from the first two months.

The NBS also said that the sur­veyed un­em­ploy­ment rates in the first three months were 5 per­cent in Jan­uary, down by 0.2 per­cent­age point year-onyear; 5 per­cent in Fe­bru­ary, down 0.4 per­cent­age point from a year ear­lier; and 5.1 in March, down 0.1 per­cent­age point year-on-year.

“First-quar­ter GDP data is on the pos­i­tive side,” said Zhu Haibin, chief China econ­o­mist of J.P. Mor­gan. “It re­duced the con­cern that eco­nomic ac­tiv­ity has slowed down. If you look at do­mes­tic ac­tiv­ity indi­ca­tors, they are hold­ing up very well,” he told Reuters.

De­spite weak fixed-as­set in­vest­ment growth, real es­tate de­vel­op­ment in­vest­ment in­creased by 10.4 per­cent yearon-year in the first three months, beat­ing mar­ket ex­pec­ta­tions and climb­ing by 0.5 per­cent­age point from the first two months, the NBS said.

Growth of in­vest­ment in real es­tate de­vel­op­ment shows that de­vel­op­ers re­main up­beat about fu­ture sales, said Liu Dongliang, an econ­o­mist of the China Mer­chants Bank. “Bol­stered by strong real es­tate in­vest­ment growth, fixed-as­set in­vest­ment will not slump as some have wor­ried about.”

The first-quar­ter data show that China’s eco­nomic re­silience re­mains and in­vestors should not be­come pes­simistic to­ward the coun­try’s growth prospects, al­though the whole year GDP growth may ease mildly, said Liu. “It is not hard for China to achieve its GDP growth tar­get for this year, and cur­rently we do not see the pos­si­bil­ity of China eas­ing mone­tary pol­icy (to sup­port growth).”

China set a GDP growth tar­get of 6.5 per­cent for this year in March.

But Liu warned that some fac­tors, such as pos­si­ble es­ca­la­tion of China-US trade dis­putes and the eas­ing growth of in­fras­truc­ture in­vest­ment due to reg­u­la­tory tight­en­ing on bank loans, should be closely mon­i­tored in judg­ing the growth trend in the sec­ond quar­ter.

Liu Yuanchun, an econ­o­mist and vice-pres­i­dent of Ren­min Uni­ver­sity of China, said China needs to pre­pare for un­cer­tain­ties such as pos­si­ble ex­port shocks from China-US trade dis­putes and do­mes­tic debt. “Ex­ter­nal and in­ter­nal un­cer­tain­ties may worsen eco­nomic fluc­tu­a­tions and cause changes in mar­ket ex­pec­ta­tions.”

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