China reported better-than-expected economic growth of 5.3 per cent in the first quarter, staying on course for this year’s growth target despite growing trade tension with the United States and Europe.
The widely watched gross domestic product (GDP) growth beat the 4.9 per cent predicted by economists polled by Chinese financial data provider Wind, and was above the 5.2 per cent expansion in the fourth quarter of last year.
“The figures were fuelled by rapid growth in the services sector, as well as increased overseas demand driving export growth in the industrial sector,” said Ding Shuang, chief Greater China economist at Standard Chartered Bank.
“A major headwind is the potential trade friction in the West, including additional tariffs, especially as the US has recently blamed China for the overcapacity issues, this is posing a challenge to China’s trade sector.”
Elsewhere, retail sales rose by 3.1 per cent in March year on year compared to the 5.5 per cent growth in combined figures for January and February, the National Bureau of Statistics said on Tuesday.
Fixed-asset investment grew by 4.5 per cent in the first three month from a year earlier, compared with an increase of 4.2 per cent rise in the first two months of the year.
Property investment, a key drag to the GDP growth last year, fell by 9.5 per cent in the first quarter year on year, compared to a fall of 9 per cent in the first two months of the year.
Meanwhile, private investment – a gauge of investor confidence – grew by 0.5 per cent in the first three months of the year.
China’s industrial output rose by 4.5 per cent year on year last month.
And the overall urban unemployment rate stood at 5.2 per cent in March, compared with 5.3 per cent in the first two months of the year.
Beijing has set its annual growth target at “around 5 per cent”, but it is seen as bold due to last year’s high base and the continued slump in the property sector.
Ding at Standard Chartered Bank estimated China’s economy would grow by 4.8 per cent this year due to challenges in the second half of the year.
More to follow …
