China’s Economy Surges in First Quarter, Beating Expectations
HONG KONG (AP) — China’s economy has shown remarkable resilience in the first three months of the year, expanding at a faster than expected pace despite challenges posed by the COVID-19 pandemic and a property crisis.
Official data released on Tuesday revealed that the world’s second-largest economy grew at a 5.3% annual pace in January-March, surpassing analysts’ forecasts of around 4.8%. This growth was driven by policies aimed at stimulating economic activity and stronger demand.
Industrial output for the first quarter rose by 6.1% compared to the same period last year, while retail sales grew at an annual pace of 4.7%. Fixed investment in factories and equipment also saw a 4.5% increase year-on-year.
China economist Louise Loo of Oxford Economics attributed the strong growth to “broad manufacturing outperformance” and increased household spending during the Lunar New Year holidays. However, she cautioned that post-holiday weakness and unpredictable external demand conditions could impact growth in the coming months.
Despite the positive economic data, Asian shares fell sharply on Tuesday, with the Shanghai Composite index losing 1.4% and the Hang Seng in Hong Kong dropping 1.9%. This decline was attributed to concerns about the impact of strong growth figures on government stimulus measures.
While China’s robust economic performance is usually seen as a positive sign for its neighbors, who rely on Chinese demand to drive their own economies, investors are now wary of potential policy changes in response to the country’s strong growth.
Policymakers in Beijing have implemented a range of fiscal and monetary measures to support the economy, with China setting an ambitious GDP growth target of about 5% for 2024. Despite the challenges ahead, the country’s economic resilience and growth prospects continue to attract global attention.