Chinese data for March was out yesterday. Pantheon wraps the broad brushstrokes.
China’s economy gained momentum in Q1, on the back of reviving investment and consumption, as the economy reopened after the lifting of zero-Covid policy. The quality of growth improved, as household spending bore more of the load, despite still sluggish private investment. Official real GDP growth accelerated 1.6 percentage points to 4.5% year-over-year in Q1 2023, the highest since Q1 2022.
A stronger services sector drove the GDP growth acceleration, as robust consumer services activity spilled over into transportation, IT services, financial services and logistics. Tertiary sector growth accelerated 3.1pp to 5.4% in Q1. By contrast, primary sector growth slowed 0.3pp to 3.7% and secondary sector growth edged down 0.1pp to 3.3%. The secondary sector, which includes manufacturing and construction, was likely pulled down by weaker export demand in the quarter as a whole, despite the marked rebound in March.
