China’s econ­omy rises 6.8% in Q1

World’s sec­ond-largest econ­omy bet­tered 6.7% fore­cast

Business World - - WORLD BUSINESS -

BEI­JING — China’s econ­omy grew a fore­cast-beat­ing 6.8% in the first quar­ter, of­fi­cial data showed Tues­day, over­com­ing Bei­jing’s bat­tle on fi­nan­cial risk and pol­lu­tion and trade tensions with the US.

The world’s num­ber two econ­omy ex­ceeded the 6.7% growth fore­cast by an­a­lysts sur­veyed by AFP, and equaled the fourthquar­ter per­for­mance.

“The na­tional econ­omy main­tained the mo­men­tum of steady and sound de­vel­op­ment,” said Xing Zhi­hong, a spokesman for the Na­tional Sta­tis­tics Bu­reau.

“The eco­nomic per­for­mance con­tin­ued to im­prove and the econ­omy was off to a good start.”

China’s sus­tained growth shows the econ­omy has re­mained re­silient even as Bei­jing kicked its war on pol­lu­tion into a high gear dur­ing the win­ter months by cut­ting pro­duc­tion for many steel smelters, mills and fac­to­ries.

Fears of a trade war with the US have also roiled mar­kets in re­cent weeks, with Wash­ing­ton and Bei­jing ex­chang­ing warn­ings of tit-for-tat tar­iffs on a sig­nif­i­cant por­tion of their bi­lat­eral trade.

The tensions have yet to cause real harm to the econ­omy, an­a­lysts say, but that may change in com­ing months when tar­iffs threat­ened by US Pres­i­dent Don­ald Trump are ex­pected to be im­ple­mented.

“Years of un­fair trade have ham­mered Amer­i­can fam­i­lies and plun­dered Amer­i­can wealth,” Mr. Trump said Fri­day in his weekly ad­dress.

“It’s been ab­so­lutely ter­ri­ble for our coun­try,” he said, adding his ad­min­is­tra­tion was propos­ing tar­iffs to “save our in­dus­tries for the fu­ture”. “We have no other choice,” Mr. Trump said.

The threat­ened tar­iffs on a $150 bil­lion worth of Chi­nese goods, and $50 bil­lion of US goods, would dent eco­nomic growth on both sides of the Pa­cific, an­a­lysts say.

DEBT FEARS

For the last decade, about 20% of China’s ex­ports have been fer­ried to the US, ac­cord­ing to Moody’s In­vestors Ser­vices, which fore­casts a ma­te­rial macroe­co­nomic im­pact if Mr. Trump makes good on his threats with the con­se­quences vi­brat­ing be­yond China’s end ex­porters and deep into the econ­omy.

Along with ex­ports, debt­fu­eled in­vest­ment has driven China’s econ­omy over the last decade — but with fears grow­ing over a pos­si­ble credit cri­sis, of­fi­cials in Bei­jing are step­ping up their bat­tle against debt and fi­nan­cial risk.

Out­put at China’s fac­to­ries and work­shops ex­panded 6.8% year on year for the first quar­ter, match­ing the ex­pan­sion seen dur­ing the same pe­riod last year, but be­low the 6.9% fore­cast by Bloomberg News. In­dus­trial pro­duc­tion grew by 6% in March.

Last week, China’s cen­tral bank re­leased data show­ing to­tal fi­nanc­ing grew at 10.5% in March, the slow­est pace on record, ac­cord­ing to China-fo­cused econ­o­mist An­drew Polk.

An­a­lysts say the fi­nan­cial risk bat­tle will take a toll on growth but China is count­ing on its 1.4 bil­lion con­sumers to pick up the slack.

Eco­nomic data show China’s savers spend­ing with re­tail sales grow­ing 9.8% in the first quar­ter on-year, out­pac­ing fore­casts of 9.7% by Bloomberg News.

But the read­ing is down from 10% in the same pe­riod of last year. —

AFP

THIS PHOTO taken on April 16 shows cargo ships at a port in Lianyun­gang in China’s eastern Jiangsu prov­ince. China’s econ­omy grew a fore­cast-beat­ing 6.8% in the first quar­ter, of­fi­cial data showed on April 17, over­com­ing Bei­jing’s bat­tle on fi­nan­cial risk and pol­lu­tion and trade tensions with the US.

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