China economy grows 5.3% in Q1, tops target

China’s economy expanded by 5.3% in the first quarter of 2024 versus the same period a year earlier, exceeding the government’s annual growth target of approximately 5%.

 

The National Bureau of Statistics announced the result on Tuesday, April 16, 2024. Officials pointed to firm industrial activity and stronger manufacturing investment as key drivers behind the better-than-expected start to the year.

 

Recent production data underscored that momentum. Industrial output in March rose 4.5% year-on-year, according to the same release, adding to evidence that factory activity has been supporting overall growth.

 

Investment figures also showed a tilt toward industry. Fixed-asset investment increased 4.5% in the first three months of the year, while investment in manufacturing climbed 9.9%, highlighting a sharper rise in spending tied to production capacity and related projects.

 

At the same time, household demand indicators were less consistent. Retail sales growth slowed to 3.1% in March, down from 5.5% in January-February, suggesting that consumption did not accelerate at the same pace as industrial and investment activity.

 

The property sector remained a notable weak spot. Property investment fell 9.5% in the first quarter, reflecting continued strain in real estate even as other parts of the economy improved.

 

Price data reinforced that ongoing pressure. New home prices declined for the ninth consecutive month in March, extending a run of monthly falls that officials have sought to address through targeted support.

 

Authorities have rolled out measures aimed at stabilising housing conditions, including easing home purchase restrictions and providing financial aid to developers. These steps were described as part of broader efforts to reduce the drag from real estate on growth.

 

Monetary policy has also remained supportive. The People’s Bank of China has kept an accommodative stance, maintaining low interest rates to encourage economic activity.

 

For global markets and policymakers, the Q1 outcome highlights a China growth profile led by industry and manufacturing investment, alongside softer consumption and persistent property-sector weakness. Key uncertainties in the latest data include whether retail sales regain momentum and how quickly housing indicators stabilise despite ongoing policy support.