China's Q1 performance lays stable foundation for annual growth

Note: The following article is taken from the Chinese-language "Commentaries on International Affairs".

The latest figures from China's national statistics bureau show that the country's GDP grew at a steady 6.4 percent in the first three months of the year. Other key indicators, such as the employment rate and per capita disposable income growth, are also showing strength. Taken together, these results show that China's economy has achieved a steady start to the year. This has boosted market confidence in China, and also laid a stable foundation for the country to achieve its annual growth target.

A bullet train in Qingdao, Shandong Province on April 8, 2019. [Photo: IC]

The 6.4 percent growth rate falls within the 6-6.5 percent annual growth target set by the central government, and was slightly ahead of the 6.3 percent projected by the International Monetary Fund. The country created 3.24 million urban jobs during the quarter, reaching 29.5 percent of the government's annual target. And per capita disposable income went up 6.8 percent year-on-year in real terms. These results show that China's economy has largely withstood the downward pressure of the slowing global economy.

In the first quarter, the service sector reported the strongest growth in added value terms by expanding 7 percent, accounting for 57.3 percent of GDP. This is up 60 basis points from more than a year ago. The high-tech sector grew by 7.8 percent. Consumption continued to be the main force driving up demand, contributing 65.1 percent of the GDP growth. Investment in the central and western regions is up, outperforming the growth in investment in other parts of the country. The consumer confidence index was up 3.2 basis points from the fourth quarter of last year. Foreign investments, cargo imports and exports, and new bank loans all went up. And in March the manufacturing sector expanded for the first time in four months. Taken together, these indicators all point to there being plenty of liquidity and increasing market confidence in China's economy.

The achievements didn't come easy, as they took place against the backdrop of escalating trade disputes and growing global economic uncertainty. The determination of China's government to push ahead with further reform and opening up has fostered stable ongoing growth and allowed China's economy to remain resilient in the face of the increasing pressures. That's also why the country has become the only major economy whose yearly growth forecast was increased recently by the International Monetary Fund.

With the prospect of a global slowdown in growth, increasing external uncertainties, and some economic structural problems still outstanding, the government will have to continue to work hard to keep economic growth within a reasonable range and achieve its performance goals for the year.