China economy grows at faster than expected pace

China’s economy grew at a faster-than-expected pace in the first quarter of the year, according to its official figures, following the end of strict COVID curbs at the end of 2022.

The country’s National Bureau of Statistics (NBS) reported an annual expansion of 4.5% between January and March.

Economists polled by the Reuters news agency had expected a rate of 4%.

On a quarterly basis, growth rose by 2.2% compared to the 0.6% figure achieved between October and December last year.

The figures showed that growth – the best rate for a year – was led by consumer spending, particularly in the areas of retail and food sales as life returned to normal for China‘s citizens.

Protests had prompted the zero-COVID policy U-turn at the end of last year.

Consumption, services and infrastructure spending have perked up since but factory output in China’s powerhouse manufacturing sector has struggled in the face of weak global growth.

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Strong exports in March may have reflected a backlog in orders, according to economists.

Chinese policymakers have pledged to step up support for the £14.5trn economy to keep a lid on unemployment, but they face limited room to manoeuvre as businesses grapple debt risks and the global recession worries.

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Matt Simpson, senior market analyst at City Index, said: “On net, that’s a decent set of figures out from China in Q1, which keeps them on track for their growth target of around 5% this year.”

There was little reaction to the figures on China’s main stock markets. Commodity and oil prices, which have risen recently to reflect greater expectations of Chinese demand, were also little changed.