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China’s Economic Growth Hits 5.3% From January To March

According to reports from the National Bureau of Statistics, China’s economic growth hits 5.3% from January to March 2024.

The National Bureau of Statistics reported that gross domestic product increased by 5.3 percent in January-March, up from 5.2 percent the previous quarter.

China’s Economic Growth Hits 5.3% – More Details

China’s economy expanded significantly faster than predicted in the first quarter of 2024, data showed Tuesday, despite being buffeted by a property-sector turmoil and declining consumer activity.

Beijing has set a target of approximately 5% growth for the year, which officials recognized last month would be “not easy” and analysts said was ambitious given the country’s current challenges.

The National Bureau of Statistics reported that gross domestic product increased by 5.3 percent in January-March, up from 5.2 percent the previous quarter.

The statistics far above analysts’ projections, with Bloomberg’s estimates putting the figure at 4.8%.

“The national economy continued the good momentum of a rebound,” the NBS said, calling it a “good start”.

Despite its political nature, GDP statistics continues to be an important indicator of the health of the world’s second-largest economy.

Dan Wang, chief economist at Hang Seng Bank China, told AFP that Tuesday’s numbers “beat the market expectations by a wide margin.”

“Consumption and housing investment was the main drag, while manufacturing and infrastructure were the main engines,” she went on to say.

It’s also indicative of “the fundamental policy shift from a focus on (the) consumer market and service sector to… industrial growth” , she said.

However, the property industry continues to be a drag on the economy, with home values falling and top developers such as Country Garden and Vanke issuing distress signals about their profits and debt repayment issues.

Fitch Ratings lowered China’s sovereign credit outlook to negative last week, warning of “increasing risks to China’s public finance outlook” as the government faces more “uncertain economic prospects”.

Policymakers have announced a number of specific initiatives, as well as the issuing of billions of dollars in sovereign bonds, to increase infrastructure expenditure and stimulate consumption.

However, economists believe that a “bazooka” stimulus is required to accomplish considerably more.

Growth is further impeded by low confidence among individuals and businesses in the face of economic uncertainty, which is reducing consumption.

However, certain sectors are performing well, particularly services, as customers return to restaurants, transportation, and tourist attractions.

However, officials reported that retail sales, the primary indication of household spending, and industrial output fell last month.

Retail sales increased only 3.1 percent year-on-year, down from 5.5 percent in the first two months of 2024, while industrial production increased 4.5 percent, compared to 7% in January-February.