China's economy
started the year stronger than projected, despite a worsening property problem.
According to
official figures, the gross domestic product (GDP) increased by 5.3% in the
first three months of 2024 compared to the previous year.
This exceeded
estimates that the world's second largest economy's growth rate would decrease
to 4.6% in Q1.
Last month, Beijing
announced an ambitious yearly growth target of "around 5%" for the
world's second largest economy.
Data from the
National Bureau of Statistics (NBS) also indicated that first-quarter retail
sales growth, a crucial indicator of Chinese consumer confidence, dipped 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," Moody's
Analytics' Harry Murphy Cruise told the BBC.
During the same
year, property investment declined 9.5%, underlining the hurdles that China's
real estate industries confront.
The numbers came as
China grappled with an ongoing housing market turmoil. According to the
International Monetary Fund (IMF), the sector represents around 20% of the GDP.
The most recent
statistics also indicated that new house prices decreased at the highest rate
in more than eight years in March.
The real estate
industry's dilemma was underscored in January when a Hong Kong court ordered
property company Evergrande to dissolve.
Rival developers
Country Garden and Shimao have also received winding-up petitions in the city.
Last week, credit
rating firm Fitch downgraded China's outlook, citing rising financial risks as
the government faces economic headwinds.
At the annual summit
of China's leaders in March, officials announced that the economy will grow by
5.2% in 2023.
For decades, the
Chinese economy grew at a rapid pace, with official numbers indicating that GDP
increased by about 10% per year on average.