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 ongoing challenges from the property market downturn and subdued domestic demand.
Quarter on quarter, China’s economy grew by 1.6 per cent in the first three months of the year, up from a rise of 1.2 per cent from the previous three months.
“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.
Beijing has pinned high hopes on consumption to drive up and consolidate the economic recovery this year, but month on month, retail sales rose by only 0.26 per cent from February.
Industrial output rose by 4.5 per cent year on year in March, much lower than the expected 5.3 per cent polled by Wind. It also dropped by 0.08 per cent month on month from February, when the industrial production was disrupted by the Lunar New Year holiday.
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.
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.
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.
