China’s industrial production growth also jumped to 6.8 per cent in January-March 2016, against a growth of 5.4 per cent in the corresponding quarter previous year.
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Meanwhile, industrial output rose 6.8% in March from a year earlier, surpassing market expectations of 5.9% and up from February’s 5.4%.
While analysts said the data is evidence of a bottoming out in the economy’s slowdown, some warn that the first quarter of 2015 got off to a similarly glowing start before a stock market crash later that year.
David Dollar, senior fellow at the John L. Thornton China Center, Brookings Institution, said Chinese authorities have “done something” on the macro level to stabilize the situation over the last couple of months. However, Li Keqiang, China’s premier, has said that missing the government’s annual growth target of 6.5pc to 7pc would be “impossible”. This year’s investment till March in fixed assets rose by 10.7 per cent, marking the strongest growth since August.March exports rose a blistering 11.5 percent from a year earlier, the first increase since June and the largest percentage rise since February 2015.
Robin Brant, BBC News reporter in Shanghai, commented, “Almost everything is up, so on the face of it good news for China”.
China’s economy slowed further in the first quarter though signs are emerging that Beijing’s various stimulus measures are helping to stabilise growth. Spending surged 20.1 percent in March while the revenue only increased 7.1 percent, according to Ministry of Finance data released Friday.
With China’s massive population base, emphasis on a long-term consumer-driven economy isn’t entirely unexpected.
Economists however, seemed uncertain about the growth sustainability.
Wei Yao, a Societe Generale economist, said that “the Chinese government was clearly giving growth all the attention in the first quarter, and now the question is how long it will maintain this undoubtedly unsustainable model”.
Year-on-year growth of 6.7 percent announced Friday matched forecasts for the slowest quarterly expansion since the first quarter of 2009.
“The tentative economic recovery is the result of the relatively easy financing environment during the previous period”, said Yang Weixiao, economist at Founder Securities in Beijing. The total value of exports was 1,050.1 billion yuan, up by 18.7 percent; and that of imports was 855.5 billion yuan, down by 1.7 percent. That means that even if China’s economy softens demonstrably, there shouldn’t be significant blowback on US goods-producers.
CNBC said China’s sustained trade recovery depends on the global outlook and a persistent weakness in external demand increases China’s downside risks.
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“We do import a lot of stuff, but the fact that they’re weak is not going to affect the amount that we import”. The real estate sector accounts for about 7-8% of GDP growth, the spokesman told reporters at the press conference. “China’s weakness is more of a problem for other countries that it trades with – the other Asian countries”.
