China Q1 GDP grows 5.0% as exports, investment pick up

by XIN Yuan

China's economy grew 5.0% year on year in the first quarter, edging up by 0.5 percentage points from the previous quarter, as stronger exports and policy-driven investment underpinned the recovery.

Data released Thursday by the National Bureau of Statistics showed quarter-on-quarter growth of 1.3%, matching market expectations. A survey of seven institutions by Jiemian News had forecast a median growth rate of 5.0%.

The bureau said supportive policies helped stabilize employment and demand, adding that the economy made a solid start to the year.

Industrial output and trade led the gains. Value-added industrial output rose 6.1% year on year, up 1.1 percentage points from the fourth quarter. Retail sales increased 2.4%, while total goods trade jumped 15.0%. Fixed-asset investment grew 1.7%, reversing a 3.8% decline recorded for the full year previously.

WANG Qing, chief macro analyst at Golden Credit Rating, attributed the pickup to two main drivers: a recovery in investment following policy support, and stronger exports lifting growth.

He added that high-tech manufacturing sectors — including chips, new energy vehicles and industrial robots — maintained strong growth, supporting overall economic expansion.

Forward-looking indicators also improved. In March, the manufacturing purchasing managers' index (PMI) rose to 50.4, while the non-manufacturing business activity index edged up to 50.1, both signaling expansion. Business expectations also strengthened.

Looking ahead, economists expect a modest slowdown in the second quarter. Wang forecast GDP growth of around 4.8%, citing stronger infrastructure investment but warning that geopolitical tensions in the Middle East could weigh on global demand and China's exports.

LUO Zhiheng, chief economist at Yuekai Securities, also expects growth of about 4.8% in the second quarter, as earlier policy support and seasonal factors fade.

"From a full-year perspective, a temporary slowdown in the second quarter would not signal a structural weakening," LUO said, describing it as a normalization of growth dynamics amid shifting policy effects and external uncertainties.

He added that policymakers retain ample room to respond, and further policy easing could target consumption, infrastructure and key sectors if external risks intensify.