China’s economic performance unexpectedly held steady in the first three months of the year despite a tariff war with the U.S., as stimulus measures helped arrest a slowdown that’s rattled investors and cast doubt over global expansion.
Gross domestic product rose 6.4% in the first quarter from a year earlier, exceeding economists’ estimates and matching the previous three months.
In March, factory output jumped 8.5% from a year earlier, much higher than forecast. Retail sales expanded 8.7%, while investment was up 6.3% in the year to date.
Pro-growth policies that have been rolled out since last year have helped drive a turnaround in consumer sentiment that’s being supported by a nascent recovery in the property market. A stronger-than-expected performance will also add to the debate over whether more stimulus measures are needed this year or if the central bank and finance ministry should now begin paring back their support.
“If you look at average quarterly growth, we are probably bottoming out already,” Cui Li, head of macro research at CCB International Holdings Ltd. in Hong Kong, said on Bloomberg TV. “In coming quarters, you will see construction, retail sales and investment data all moving up. The numbers say the soft patch is largely behind us.”
Investment by state-owned companies quickened to 6.7% and slowed for private firms to 6.4%, underscoring the government’s role in supporting growth. Economists forecast a full-year growth rate of 6.2% in 2019, down from 6.6% last year.
Forecasters had expected the Chinese economy to begin a recovery last year, but that timeline was disrupted after President Trump increased tariffs on Chinese imports.