Photo:Global Times

China's GDP grew by 5.3 percent in the first quarter of 2024, well above market expectations as the world's second largest economy has gotten off to a robust start and laid a solid foundation for the economy to achieve the pre-set goal of growing by around 5 percent for the whole year.

The growth rate, underpinned by solid growth in export and robust growth in high-tech industrial output, means China remains the fast growing major economies in the world, and continues to play a leading role to drive global economic recovery, Chinese analysts said.

The data, significantly higher than the average forecast of 4.6 percent by economists polled by Reuters, reflect the resilience of the Chinese economy and the attractiveness of its vast consumer market and manufacturing goods, which also offers a strong rebuttal of some Western media's narrative of Chinese economy reaching its peak, they said. 

Retail sales grew 4.7 percent year-on-year to 12.03 trillion yuan ($1.66 trillion) in the first quarter, while industrial added-value was up 6.1 percent, and fixed-asset investment rose by 4.5 percent to 10 trillion yuan, according to data released by the National Bureau of Statistics (NBS) on Tuesday.

Unemployment rate was 5.2 percent in March, a 0.1 percentage point drop from a month earlier, the official data showed.

China's economy made a good start with positive factors amassing, laying a strong foundation for achieving the annual development targets, deputy head of NBS Sheng Laiyun said at the State Council Information Office press conference on Tuesday. 

At the next stage, China will actively cultivate and develop new quality productive forces and strengthen the implementation of the government's macro policies, and continue to effectively pursue high-quality economic growth and appropriately increase economic output, he said.   

The data came as the growth of industrial output and consumption slowed down in March with the disappearance of stimulus from holiday spending and low base effect, indicated the solid overall growth of the Chinese economy in the quarter, analysts said.

Quarter over quarter, economy grew 1.6 percent in the first quarter, faster than an expected 1.4-percent growth by market analysts.

The GDP growth in the first quarter is within market expectation and reflects that the world's second-largest economy is setting off a positive start, Tian Yun, a veteran economist based in Beijing, told the Global Times. 

"Growth in the supply side has been sustaining the recovery momentum, especially in high value-added industries which are representatives of the new quality productive forces," Tian said. He added that the first-quarter foreign trade data also displayed a palpable turnaround from last year's flat performance, reflecting a recovery in global demand that is set to drive industrial growth this year.

In March alone, retail sales increased 3.1 percent, narrowing down from a 5.5 percent growth on February. Industrial value-added rose 4.5 percent, slowing down from a reading of 7-percent recorded in January-February period.

Fixed-asset investment went up 4.5 percent in the first three months, compared with a 4.2 percent increase in the January-February period, data from NBS showed. 

The investment reading also sent a positive sign, even as new construction projects were suffering a two-digit decline in the first quarter amid an ongoing adjustment in the property sector, Tian noted.

China's economic data for Q1 2024 Graphic: Xu Zihe/GT

Sun Chuanwang, a professor at Xiamen University, told the Global Times on Tuesday that growth was fueled by strong momentum in equipment manufacturing, high-tech industries and pick-up in consumption, including tourism sectors, and "the shift toward high-quality development is characteristic for the quarter."

Looking forward, Tian noted that considering the high base of last year's second quarter, more supportive measures are needed to consolidate the recovery momentum so that the GDP could hit the annual goal of expanding at around 5 percent this year.

Several key factors determine this year's economic prospects, including a sustained rebound in foreign trade and an end to structural adjustment in the property sector, according to Tian, and those are areas which Chinese policymakers should double down on their efforts.

"China, with its huge market of 1.4 billion consumers and a 400 million strong middle class, and the broadest arrays of industries, will be the indisputable anchor of stability for the global economy amid the current complex situation," Cao Heping, an economist at Peking University, told the Global Times.

Analysts pointed out that the Chinese economy faces the issue of subdued consumer confidence, a correction in the property sector and weak private sector investment but the country's high levels of household savings, ample policy space are all at healthy levels allowing more time for policymakers to further repair the impact of COVID-19 on consumption.

China's total imports and exports expanded to reach 10.17 trillion yuan in the first quarter of 2024, according to data released by the General Administration of Customs on Friday. The growth, at 5 percent year-on-year, was at the fastest pace in six quarters.

Since the beginning of 2024, China strengthened efforts to boost consumption by promoting equipment upgrades and consumer goods trade-ins, as well as accelerating the development of new quality productive forces and AI plus initiatives.

The nation also accelerated its pace of opening-up, with the announcement of the 24-point measures to stabilize foreign investment and a range of visa exemption policies to facilitate business travel.

Amid a growing number of signs of strong recovery momentum in the Chinese economy, some major international financial institutions are revising up China's GDP projections for the year. 

China's official manufacturing PMI, a main gauge of factory activity, stood at 50.8 in March, returning to expansion territory for the first time since September 2023. 

Goldman Sachs and Citi recently released separate reports stating that China's economy is off to a good start in 2024. It is expected that the GDP growth target of "around 5 percent" set by the Chinese government can be achieved, and the forecast for China's GDP growth rate for the full year has been raised, according to the Xinhua News Agency.

Global Times