China’s Economy Surges Beyond Expectations in First Quarter with 5.3% Annual Growth Rate, Despite Challenges Caused by COVID-19 Pandemic

China’s economy has exceeded expectations in the first quarter, with a 5.3% annual growth rate compared to analysts’ forecasts of 4.8%. This growth can be attributed to policies and increased demand. Despite the slowdown in demand and property crisis affecting growth caused by the COVID-19 pandemic, 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 this period.

The strong manufacturing performance and increased household spending during the Lunar New Year holidays drove this growth, along with supportive policies for investments. However, signs of weakness have emerged in March with uncertainties in external demand and a decline in import and export figures. Inventory adjustments, normalization of post-holiday spending, and cautious stimulus measures could impact growth in the second quarter.

Policymakers in China have introduced various fiscal and monetary measures aimed at boosting the economy. The government has set a GDP growth target of 5% for 2024, showing its commitment to supporting economic recovery and growth despite the challenges faced by the pandemic.