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.
Photo: AFP
“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.
Investors who have plowed back into Chinese stocks have been counting on continued stimulus from Beijing, but with the economy steadying leaders could pull back from further support, analysts said.
“The People’s Bank of China appears to be more cautious about further easing,” Australia and New Zealand Banking Group Ltd economist Raymond Yeung (楊宇霆) said.
“We believe that policymakers will reassess the need for further stimulus,” he said in a note.
Another drag on the economy, the US-China trade spat, appears to be approaching a resolution with both sides sounding notes of optimism that a deal will be done.
The two sides have exchanged tariffs on more than US$360 billion in two-way trade, hurting manufacturers in China and farmers in the US.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last