---
title: "China economic growth bounces back as consumers spend again"
description: "China’s economy grew at the fastest pace in a year in the first quarter as the end of Covid Zero gave way to stronger consumer spending and factory output, a sign the recovery is well on track."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "Business Maverick"
author: "Bloomberg"
author_url: "https://www.dailymaverick.co.za/author/bloomberg/"
canonical_url: "https://www.dailymaverick.co.za/article/2023-04-18-china-economic-growth-bounces-back-as-consumers-spend-again/"
published: "2023-04-18T05:57:29"
lang: "en-ZA"
word_count: 366
---

# China economic growth bounces back as consumers spend again

> China’s economy grew at the fastest pace in a year in the first quarter as the end of Covid Zero gave way to stronger consumer spending and factory output, a sign the recovery is well on track.

By Bloomberg · Published 18 April 2023, 07:57 SAST

## Key points
- China's economy showed signs of recovery in the first quarter, but a complex international environment and insufficient domestic demand mean the outlook remains uncertain. Analysts are divided on whether the government needs to roll out more stimulus to boost growth.
- China's GDP grew 4.5% in Q1, faster than expected
- Retail sales surged 10.6%, industrial output rose 3.9%
- Fixed-asset investment was lower than expected, property investment worsened to 5.8%
- Economists divided over whether more stimulus is needed

## Content

Gross domestic product expanded 4.5% in the January-to-March period from a year prior, data released by the National Bureau of Statistics showed on Tuesday, faster than the 2.9% pace in the previous quarter and higher economists’ forecasts of 4%.

A rebound in consumer spending and a ramping up in government infrastructure investment helped to boost growth in the first quarter. However, indicators for March showed a more mixed picture, with investment growth likely slowing and industrial activity remaining relatively subdued.

- Retail sales surged 10.6% in March from a year ago, higher than the 7.5% forecast by economists
- Industrial output rose 3.9%, weaker than the 4.4% projected
- Fixed-asset investment was also lower than expected, rising 5.1% in the first quarter from a year earlier. The contraction in property investment worsened to 5.8% in the period
- The urban jobless rate decreased to 5.3% last month from 5.6% in February

China’s benchmark CSI 300 Index of equities edged up 0.1% as of 10.04am local time. The offshore yuan extended its gain to as much as 0.3% to touch a session high of 6.8648 per dollar after the release, before paring back to 6.8755. China’s 10-year government bond yield slipped 1 basis point to 2.84%.

Fu Linghui, a spokesman for the NBS, said a complex international environment and insufficient domestic demand mean the foundation for the economy’s rebound is “not yet solid”.

Recent economic indicators have provided [conflicting](https://www.bloomberg.com/news/articles/2023-04-13/china-s-contradictory-data-fuels-debate-over-need-for-stimulus) signals about the recovery, suggesting the growth outlook remains uncertain. While credit and exports surged in March inflation remained weak, a sign of muted domestic demand in the economy.

Economists are divided about whether the government needs to roll out more stimulus to boost growth. Beijing last month set a [cautious GDP growth target](https://www.bloomberg.com/news/articles/2023-03-05/china-sets-modest-growth-target-as-economic-risks-persist) of around 5% for this year, suggesting there isn’t scope for any significant economic support.

People’s Bank of China Governor Yi Gang said last week the economy was on track to [grow](https://www.bloomberg.com/news/articles/2023-04-14/pboc-s-yi-says-china-to-achieve-gdp-target-property-improving) in line with the target, adding that the property market was stabilising. The central bank on Monday refrained from cutting a key interest rate and [curbed](https://www.bloomberg.com/news/articles/2023-04-17/china-pumps-in-more-liquidity-while-keeping-key-rate-on-hold)its cash injection into the banking system — although some analysts still see scope for easing in coming months. **BM/DM**