- China’s GDP grew 4.5% in the first quarter to 28.5 trillion yuan (US$4.1 trillion), beating the government’s own target of 4% for the period
- The economic upsurge followed Beijing’s abrupt dismantling of pandemic lockdowns and reopening of the country’s borders late last year after its strict zero-Covid policy kept industrial output low and signs of popular impatience emerged
- The government has not tweaked its GDP growth forecast for this year to 5% as a result of the strong economic rebound
China’s economy made a good start in 2023 with its gross domestic product in the first quarter reaching 28.5 trillion yuan (US$4.14 trillion), up 4.5% year on year, beating its own target of 4% for the period.
The National Bureau of Statistics announced the quarterly growth figures on April 18, attributing the economy’s unexpected expansion to the nation’s adherence to directions from the communist leadership to make economic stability the top priority while pursuing progress and ensuring stability.
China’s economic upsurge followed the government’s abrupt dismantling of pandemic lockdowns and reopening of the country’s borders in a bid to help revive the economy after its strict zero-Covid policy kept industrial output low and signs of popular impatience emerging late last year.
The government is forecasting GDP growth of around 5% this year, a modest target after the economy grew just 3% in 2022, among the weakest annual rates in decades.
The Asian Development Bank, in its Asia Development Outlook for April, forecast China’s growth this year at 5%, in line with Beijing’s expectations, and easing to 4.5% in 2024.
Reuters reported that investors have been closely watching first-quarter data to assess the strength of the recovery after the lifting of the pandemic curbs in December and eased a three-year crackdown on technology companies and property developers.
“Economic recovery is well on track. The bright spot is consumption, which is strengthening as household confidence improves,” Reuters quoted Zhiwei Zhang, chief economist at Pinpoint Asset Management, as saying. “The strong export growth in March also likely helped to boost GDP growth in Q1.”
For the first quarter, China’s GDP grew 2.2%, up from a 0.5% rise at the end of last year.
By industry, the value added of the primary industry was 1.16 trillion yuan, up 3.7% year on year; the secondary industry added 10.79 trillion yuan, up 3.3%; and the tertiary industry was 16.56 trillion yuan, up by 5.4%.
Industrial production recovered gradually with total value added of industrial enterprises above the designated size growing 3.0% y-o-y in the first quarter, 0.3%age point higher than in Q4 2022.
In terms of sectors, the value added of mining rose 3.2%, that of manufacturing increased 2.9%, and that of production and supply of electricity, thermal power, gas and water grew 3.3%. The value added of equipment manufacturing rose 4.3%, 2.5%age points higher than in the first two months.
The consumer price index (CPI) rose 1.3% y-o-y with prices for food, tobacco and alcohol increasing 2.9% y-o-y; clothing up 0.7%; housing down 0.2%; articles and services for daily use up 1.2%; transportation and communication up 0.1%; education, culture and recreation gaining 1.7%; medical services and health care up 0.9%; and other articles and services rising 2.7%.
Prices of fresh fruit climbed 11.0%, pork jumped 8.5%, grain increased 2.5% and fresh vegetable down 2.9%. The core CPI excluding the price of food and energy grew 0.8% y-o-y. In March, the consumer price index rose 0.7% y-o-y and eased 0.3% month on month.
In the first quarter, the producer prices for industrial products declined 1.6% y-o-y. Specifically, prices in March dropped 2.5% y-oy, or stayed at the same level month on month. Industrial producers’ purchasing prices eased 0.8% and prices dropped 1.8% y-o-y in March.
The total value of imports and exports of goods was 9.89 trillion yuan, an increase of 4.8% y-o-y, with exports’ value growing 8.4% to 5.65 trillion yuan while the value of imports gained 0.2% to 4.24 trillion yuan. The trade balance was 1.41 trillion yuan in surplus.
NBS said as the COVID-19 prevention and control shifted rapidly and steadily to the new phase, multiple policies and measures to stabilize growth, employment and prices took effect, firing up the national economy’s steady recovery and good start.
“However, we must be aware that the situation abroad is still complex and volatile, inadequate domestic demand remains prominent and the foundation for economic recovery is not solid yet,” NBS said.
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