China Paradox: Production Slows, GDP Rises

According to National Bureau of Statistics of China (NBSC), the Chinese economy has had “an excellent start to 2024.” At the end of the first three months of 2024, China’s GDP recorded growth of 5.3%, that is, 0.3-0.5% higher than analysts’ expectations and slightly above the results recorded in the last quarter of previous year (+5.2%). The Chinese government has set a growth target of “just above 5 percent” for the entire year 2024. The economic performance of the first three months reinforces expectations that the government will be able to meet its annual targets.

The situation of Chinese industrial production, victimized by the US-led trade and technology war, and the trend of domestic consumption and retail sales, the Achilles’ heel of the Chinese economy, is a matter of concern. According to the NBSC, production for the first three months of 2024 is up 4.5% year-over-year, less than 7% in January-February and below the 5.4% estimate. As for sales, growth was 3.1%, less than the expected 4.5% and slowing from 5.5% in January-February: this is the 14th consecutive month of growth, but the slowest pace since July 2023.

In the first quarter, China’s foreign trade volume increased 5% year-on-year to 10,169 billion yuan (about $1,404 billion). Exports in January-March 2024 rose 4.9% to 5,738 billion yuan ($792 billion), while imports rose 5% to 4,432 billion yuan ($612 billion).

As for the property market situation, prices of new homes in the country fell in March at the fastest pace since August 2015, highlighting the fragile state of the sector despite Beijing’s efforts to boost demand with supportive policies. According to the NBSC, prices fell 2.2% year-over-year, well above February’s 1.4%.

The full text of the NBSC report from Pluralia’s website in English can be downloaded here