China’s economy grew faster than expected in the first quarter

China’s economy grew faster than expected in the first quarter

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) grew by 5.3% in the first three months of 2024, compared to the previous year.

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 the 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 Chinese consumer confidence, fell to 3.1%.

“You can’t produce growth forever so we really need to see households come to the party if China is to hit that growth target of around 5%,” Harry Murphy Cruise of Moody’s Analytics told the BBC.

During the same period real estate investment fell 9.5%, highlighting the challenges facing Chinese real estate firms.

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

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

The crisis in the property industry was 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 winding-up petitions in the city.

Last week, credit rating agency Fitch cut its outlook for China, citing growing risks to the country’s finances as it faces economic challenges.

At the annual gathering of Chinese leaders in March, officials said the economy would grow by 5.2% in 2023.

For decades China’s economy has grown at an outstanding rate, with official figures putting its GDP growing at an average of nearly 10% per year.