China economy off to strong start in 2019 as stimulus steps offset trade war impact

All major economic indicators released by Beijing on Wednesday point to bottoming out of Chinese economy

Headline growth of 6.4 per cent in the first quarter stronger than expected, matching the previous quarter

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Women work on a data cable production line at a factory in Xinyu, Jiangxi province, China April 8, 2019. Photo: Reuters

Published: 12:44pm, 17 Apr 2019Updated: 11:24pm, 17 Apr 2019

China’s economy is off to a robust start this year, defying fears of a sharp slowdown, with Beijing’s pro-growth efforts successfully offsetting the effects of the trade war with the United States.

China’s gross domestic product (GDP) expanded 6.4 per cent in the first quarter compared to a year earlier, the National Bureau of Statistics reported on Wednesday, beating analysts’ expectations of 6.3 per cent growth and remaining at the top end of Beijing’s target growth range of 6.0 to 6.5 per cent for this year.

All major indicators released Wednesday – industrial production, fixed-asset investment, retail sales and the urban jobless rate – showed improved performance from previous months, with the latter two coming in stronger than expected.

Industrial production, for instance, expanded 8.5 per cent in March from a year earlier, the strongest growth since July 2014, against expectations of a 5.9 per cent gain.

Industrial production expanded 8.5 per cent in March from a year earlier, the strongest growth since July 2014, against expectations of a 5.9 per cent gain. Photo: EPA-EFE

The upbeat data comes as Beijing and Washington appear to be entering the final stages of their negotiations to end the trade war and offers fresh evidence that the Chinese economy may have already reached its low point and started to rebound.

“There is no denying that China’s economy ended the first quarter on a stronger note,” Julian Evans-Pritchard, senior China economist at Capital Economics, wrote in a note. “China’s economy will bottom out before long if it has not already.”