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China’s economy surpassed expectations in the first quarter, with a 5.3% annual growth rate compared to analysts’ projections of 4.8%. This growth can be attributed to supportive policies and increased demand. Despite facing challenges such as a slowdown in demand and a property crisis, the economy has been making progress towards recovery.
Industrial output increased by 6.1% in the first quarter compared to the previous year, while retail sales grew by 4.7%. Fixed investment also saw a 4.5% increase during the same period. The growth was driven by strong manufacturing performance, increased household spending during Lunar New Year holidays, and favorable policies for investments.
However, signs of weakness are emerging in March due to uncertainties in external demand and declining import and export figures. Factors such as inventory adjustments, post-holiday spending normalization, and cautious stimulus measures could impact growth in the second quarter.
To support economic recovery and growth, policymakers in China have introduced various fiscal and monetary measures. For example, they have set a GDP growth target of 5% for 2024, indicating their commitment to sustaining economic momentum towards achieving this goal.