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China economy grows faster than expected in first quarter

2 days ago
By Mariko Oi,
Business reporter

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Getty Images A shopper at supermarket in China.Getty Images
China's first quarter retail sales growth slipped
China's economy made a stronger-than-expected start to the year, even as the crisis
in its property sector deepened.

According to official data, gross domestic product (GDP) expanded by 5.3% in the
first three months of 2024, compared to a year earlier.

That beat expectations the world's second largest economy could see growth slow to
4.6% in the first quarter.

Last month, Beijing set an ambitious annual growth target for world's second
largest economy of "around 5%".

Data from the National Bureau of Statistics (NBS) also showed first quarter retail
sales growth, a key gauge of China's consumer confidence, fell to 3.1%.

"You cannot manufacture growth forever so we really need to see households come to
the party if China wants to hit that around 5% growth target," Harry Murphy Cruise
from Moody's Analytics told the BBC.

In the same period property investment fell 9.5%, highlighting the challenges faced
by China's real estate firms.

The figures came as China continues to struggle with an ongoing property market
crisis. According to the International Monetary Fund (IMF), the sector accounts for
around 20% of the economy.

The latest data also showed new home prices fell at the fastest pace for more than
eight years in March.

The real estate industry crisis has been highlighted in January when property giant
Evergrande was ordered to liquidate by a court in Hong Kong.

Rival developers Country Garden and Shimao have also been hit with a winding-up
petitions in the city.

Last week, credit ratings agency Fitch cut its outlook for China, citing increasing
risks to the country's finances as it faces economic challenges.
At the annual gathering of China's leaders in March officials said the economy grew
by 5.2% in 2023.

For decades the Chinese economy expanded at a stellar rate, with official figures
putting its GDP growing at an average of close to 10% a year.

Xi Jinping
International Business
China
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