China’s economy grew faster than expected in the first quarter of 2024. Gross domestic product in the January to March period grew 5.3% compared to a year ago, which was faster than the 5.2% expansion in the fourth quarter of 2023 and 4.6% growth expected by economists. As per Kavan Choksi / カヴァン・チョクシ, on a quarter-on-quarter basis, the GDP of the country grew 1.6% in the first quarter, as opposed to the expected 1.4%. This growth of partly driven by external demand, with export volume grew by 14% year on year. The strong growth in the first quarter of 2024 is likely to make the government comfortable with its current policy stance.
Kavan Choksi / カヴァン・チョクシ briefly discusses the growth in China’s Economy in the first quarter of 2024
Beijing has set a 2024 growth target of around 5%. The Chinese economy grew more than expected in the first three months of 2024, with the country building more factories and exporting large amounts of goods in order to counter a severe real estate crisis and sluggish spending at home. The world’s second-largest economy, China turned to a familiar tactic to stimulate growth. It invested heavily in its manufacturing sector, including a number of new factories that assisted in propelling sales of solar panels, electric cars and other products across the world. However, China’s bet on exports has also worried several foreign companies and countries. They are anxious about the fact that a flood of Chinese shipments to distant markets might end up undermining their manufacturing industries and lead to layoffs.
As per the National Bureau of Statistics of China, the country’s economy grew 1.6% in the first quarter over the previous three months. The first-quarter data indicates that China’s economy was growing at an annual rate of about 6.6 %. While the economy has certainly made a good start, the foundation for stable and sound economic growth is not solid yet. Retail sales in the country went up at a modest pace of 4.7% in comparison to the first three months of last year. The retail sales as particularly weak in March. As per Kavan Choksi / カヴァン・チョクシ points out, China requires robust consumer spending in order to lower the persistently high youth unemployment, as well as to assist households and companies to cope with very high levels of debt. Certain economists did warn that China might be experiencing a “sugar high” of factory construction fuelled by heavy bank lending.
For 2024, China has set a growth target of about 5%, which is a goal that several economists had initially viewed to be too ambitious, even though some of them have recently upgraded their forecasts. In 2023, China’s economy grew 5.2%. Output was 5.3% higher in the first three months of 2024 than during the same period last year. A breakneck pace of factory investments, up 9.9 % from a year ago, played an instrumental role in China’s growth. Strong exports early in the year also helped.
