The Chinese economy grew by more than market expectations in the first quarter of 2019, with a rise in gross domestic product (GDP) of 6.4% on a year-on-year basis, ahead of forecast growth of 6.3%.
Schroders emerging markets economist Craig Botham said the results were something of surprise to China observers. “Given the weakness in high frequency data for the first two months of 2019, this came as a surprise to most economists, and it looks like the economy was bailed out by a strong turnaround in March”, he commented. Botham added: “If we were to sound a note of caution, it would be to note that GDP was supported by an acceleration in the manufacturing sector, which offset slowdowns elsewhere in the economy.”
Another commentator, Michelle Qi, chief investment officer, equities at Eastspring Investments, said that industrial production and retail sales picked up in the quarter, while property and infrastructure investment also increased. She added: “Considering that Q1 is already behind us, we believe market focus would then turn to potential changes in policy stance as well as the sustainability and strength of the ongoing economic recovery.”