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Sunday, April 14, 2024  
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China GDP jumps 4.5% in Q1 after zero-Covid scrapped

The figures were the first snapshot since 2019 of a Chinese economy
This general view taken from a ferry shows the city’s skyline during evening hour in Hong Kong on December 19, 2022. AFP
This general view taken from a ferry shows the city’s skyline during evening hour in Hong Kong on December 19, 2022. AFP

BEIJING: China’s economy grew 4.5 percent year-on-year in the first quarter, rebounding after the end of zero-Covid measures late last year, official data showed Tuesday.

The figures were the first snapshot since 2019 of a Chinese economy – the world’s second-largest – unencumbered by the strict health measures that helped keep the coronavirus in check but battered businesses and supply chains.

Retail figures, the main indicator of household consumption, were up 10.6 percent on-year in March, the biggest bounce since June 2021.

According to data published by the National Bureau of Statistics (NBS), industrial production in March climbed 3.9 percent on-year.

Tuesday’s NBS report said in the first three months of the year China had faced a “grave and complex international environment as well as arduous tasks to advance reform, development and ensure stability at home”.

Beijing’s virus containment policy – an unstinting regime of strict quarantines, mass testing and travel curbs – strongly constrained normal economic activity before it was abruptly ditched in December.

The Chinese economy is also beset by a series of other crises, from a debt-laden property sector to flagging consumer confidence, global inflation, the threat of recession elsewhere, and geopolitical tensions with the United States.

The official January-to-March growth figure was significantly higher than the 3.8 percent predicted by analysts in an AFP poll.

China’s economy grew by just three percent in the whole of last year, one of its weakest performances in decades.

It posted a 4.8 percent expansion in the first quarter of 2022, though that slowed to just 2.9 percent in the final three months of the year.

The government has set a comparatively modest growth target of around five percent this year, a goal the country’s Premier Li Qiang has warned could be hard to achieve.

An AFP poll of analysts predicted that the Chinese economy would grow by an average of 5.3 percent this year.

That is roughly in line with the International Monetary Fund’s forecast of 5.2 percent.

Still, experts have warned that wider global trends could yet weigh on China’s recovery.

Teeuwe Mevissen, an analyst at RaboBank, said: “Consumption saw a recovery during the first quarter partly because of pent-up demand but is not yet back on pre-pandemic levels.

“Loss in household wealth due to the real estate crisis and loss of household income during the pandemic are factors why consumers have not spent more.”

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