Thu, Apr 18, 2019 - Page 10 News List

China’s growth beats forecasts

AN ‘ARDUOUS’ TASK:A Chinese National Bureau of Statistics spokesman said that while the economy’s performance was stable, downward pressure persists


Two staff members stand at a port in Qingdao, China, yesterday.

Photo: AFP

China’s economy expanded more than expected in the first three months of the year as government moves to kick-start growth helped offset weak global demand and a US trade dispute, data showed yesterday.

The 6.4 percent reading was the latest in a string of figures indicating the world’s No. 2 economy and key driver of global growth is stabilizing after decelerating every quarter last year, although officials warned of headwinds.

“The national economy enjoyed stable performance with growing positive factors, and stronger market expectation and confidence,” Chinese National Bureau of Statistics spokesman Mao Shengyong (毛盛勇) said.

“Given slowing global economic growth and international trade, increasing international uncertainties and prominent domestic structural issues, the task of reform and development is arduous and downward pressure on the economy persists,” Mao said.

Top policymakers in Beijing last month unveiled a number of major plans to support the flagging economy with massive tax cuts, fee reductions and financing support.

Officials pressed on with the drive to shift China to a more sustainable growth model, strengthened policies to counter the downturn and “spared no effort to put the policies into effect,” Mao said.

Beijing faces a delicate balancing act as it tries to support businesses in need of credit, without further inflating its debt balloon.

New credit flooded into the financial system last month, with the growth of bank loans and total outstanding credit accelerating — thanks to measures to boost lending — although analysts say it is likely to take about six months to spark a full economic turnaround.

“The better-than-expected [first quarter] figures reflect a strong March,” Capital Economics senior China economist Julian Evans-Pritchard said in a note, adding that seasonal factors could have contributed to the uptick.

“With credit growth now accelerating and sentiment improving, China’s economy will bottom out before long if it hasn’t already,” he said.

The government lowered its growth target for China this year to 6 to 6.5 percent, having chalked up its slowest pace for almost three decades last year.

However, while growth remains relatively slow, the crucial unemployment rate remains low and fell to 5.2 percent last month from 5.3 percent in February.

Beijing is counting on consumers and renewed investment to stabilize the economy.

The latest data showed that last month’s retail sales rose 8.7 percent year-on-year after stagnating at 15-year lows for three months, although data on revealed that imports plunged in the first quarter, feeding worries about weak demand.

Infrastructure spending also expanded 4.4 percent in the first three months of the year, sharply up from 3.8 percent last year, when the government stepped up a campaign against debt and financial risk.

The broader fixed-asset investment indicator rose 6.3 percent for the first three months, from 6.1 percent in the January to February period. Output growth at China’s factories and workshops last month shot up 8.5 percent, from 5.3 percent in the first two months, well above forecasts.

The figures come after a number of positive indicators on the economy, including improving factory activity and inflation, pointing to a brighter outlook.

“From Beijing’s perspective, this set of data should show that the policy reset in mid-2018 from deleverage to growth support is starting to yield results,” said Tai Hui (許長泰), chief market strategist for Asia-Pacific at JP Morgan Asset Management.

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