China surpasses expectations with 5.3% economic growth in first quarter

China’s economy beat expectations in the first quarter, with a boost from policies and increased demand, the government announced on Tuesday. The world’s second-largest economy expanded at a 5.3% annual pace in January-March, surpassing analysts’ forecasts of about 4.8%. Growth was up 1.6% compared to the previous quarter, despite struggles to recover from the COVID-19 pandemic, a slowdown in demand, and a property crisis.

Industrial output for the first quarter rose by 6.1% compared to the same period last year, while retail sales grew by 4.7% annually. Fixed investment for the first quarter also saw a 4.5% increase compared to the same period a year ago. Economists attribute the better-than-expected performance to strong manufacturing output, increased household spending during the Lunar New Year holidays, and policies aimed at boosting investments.

However, concerns remain for the coming months as indicators show weakness post-Lunar New Year and uncertainties in external demand. Factors like inventory adjustments, normalization of post-holiday spending, and cautious stimulus measures may affect growth in the second quarter. Policymakers have introduced fiscal and monetary measures to support the economy, with China setting an ambitious GDP growth target of 5% for 2024.