China Confirms With-Corona Effect... Q1 Economy Up 4.5% (Comprehensive)

At the end of last year, China's economic growth rate rebounded, surpassing expectations after transitioning to a With-Corona system. Although industrial production was weaker than expected, key real economy indicators such as retail sales and urban unemployment rates showed clear improvements.

According to the National Bureau of Statistics of China on the 18th, China's GDP growth rate for the first quarter recorded 4.5% year-on-year, significantly exceeding the previous quarter's growth rate (2.9%) and market expectations (4.0%). Based on quarterly growth rates, this is the highest figure in over a year since the first quarter of last year (4.8%). However, it falls short of the Chinese government's annual economic growth target for this year (around 5.0%).

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Retail sales, which reflect consumer spending changes across various distribution channels such as department stores and convenience stores, also surged, signaling a recovery in the real economy. Retail sales in March increased by 10.6% year-on-year, greatly surpassing the previous month's figure (3.5%) and the forecast (7.4%). This is the first time since June 2021, when the monthly retail sales growth rate was 12.1%, that China has seen double-digit monthly retail sales growth. For the first quarter, retail sales rose 5.76% year-on-year.

The urban unemployment rate, which affects disposable income for consumption, improved to 5.3% as of March, better than the previous month's rate (5.6%) and the forecast (5.5%).

On the other hand, industrial production fell short of expectations. It increased by 3.9% year-on-year in March and by 3.0% for the first quarter. Although the March figure showed a larger improvement compared to January-February (2.4%), it was below the market forecast (4.0%). China's industrial production measures the total output of factories, mines, and public facilities, reflecting manufacturing trends and serving as a leading indicator for employment and average income. Fixed asset investment recorded 5.1% growth from January to March, falling short of the previous month's figure (5.5%) and the forecast (5.7%).

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