Editorial | China growth figures leave many questions yet to be answered
- First-quarter GDP rise of 4.5 per cent may have beaten expectations, but it remains to be seen whether an apparent recovery is on solid footing and sustainable
The world and Asia especially have been waiting on an economic update from China. Hopes of achieving even anaemic global growth this year largely depend on China.
On paper, first-quarter gross domestic product expansion of 4.5 per cent beats market expectations of 4 per cent, keeping this year’s target of around 5 per cent within reach.
At first glance it is a relief and grounds for optimism, given that China is predicted to contribute a third of global growth this year.
But the figures leave a big question unanswered – whether apparent recovery is solidly founded and sustainable, or still rests on a fragile footing.
The question is raised, for example, by numbers for fixed-asset investment and domestic consumption – major drivers of China’s economy – which remain unconvincing.
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Better-than-expected first-quarter trade figures look more convincing, but some argue they may reflect pent-up orders that mask weak demand. Coupled with the negative effect of global supply-chain disruption, this may be telling for future growth.