China's Q1 GDP grows 6.8 pct year on year

Beijing Central Business District [File photo: VCG]

New figures show China's economy expanded 6.8% year on year through the first quarter, surpassing the full-year economic growth target of 6.5% for year.

A number of observers say they believe the first-quarter stats lay a solid foundation for sound economic growth through the rest of this year.

The new data shows the service sector grew faster than it did during the same period last year, contributing nearly 62% to China's overall economic growth. 

At the same time, the National Bureau of Statistics is also reporting a stable jobless rate and inflation.

"China's GDP growth rate has stayed within the range of 6.7% to 6.9% for the past 11 quarters. The employment has grown steadily, with unemployment in the urban areas being maintained at around 5%. The prices of consumer goods have also remained stable, while the momentum of industrial goods price increases has eased," said NBS spokesperson Xing Zhihong.

The data also suggest innovation has had a driving effect on economic growth through the first quarter.

Xing Zhihong also says consumption played a pivotal role in fostering growth, while investment has also helped balance supply and demand.

"Consumption contributed 77.8% to the total economic output in the first quarter, compared with 58.8% for the whole of last year, with consumption becoming the top engine of the Chinese economy for the fifth consecutive year. The investment structure has also been optimized, with the private sector more actively involved. Private sector investment accounts for over 60% of the total, showing growth of 8.9% in the first quarter, 2.9% faster than last year. Meanwhile, the scope of private sector investment is expanding with some important areas being strengthened. "

In foreign trade, China saw import growth outpace exports, lowering the trade surplus.

Xing Zhihong does caution the Chinese economy may face a hit as a result of rising trade protectionism, a change of monetary policies and financial market turbulence.

However, he argues the positive momentum will not be harmed.

"The efforts of reform and opening up, as well as well innovation, are expected to be further enhanced. Market players are showing growing confidence in the overall picture. In March, the manufacturing PMI marked its 20th consecutive month of expansion, while the non-manufacturing PMI maintained a level above 54 for the seventh consecutive month. The Consumer Confidence Index also reached 122.3 – a high level based on historic records. The inherent driving force for China's economy consolidated in terms of supply, demand, and market expectation, providing strong support for sustained sound development."