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China’s Retail Sales and Industrial Production Shine in March, Strongest Q1 2023 GDP in a Year

China’s industrial production in March rose by 3.9 percent year on year, according to the National Bureau of Statistics (NBS), surpassing the growth rate of 2.4 percent recorded in the January-February period. Although slightly below analysts’ expectations of a 4 percent increase, the March data indicated a positive momentum in China’s manufacturing sector.

In addition, China’s retail sales in March surged by 10.6 percent, surpassing analysts’ expectations of a 7.4 percent increase and showing robust growth compared to the 3.5 percent growth recorded in January and February. The strong performance in retail sales was driven by increasing domestic consumption as the Chinese economy continued to recover from the impact of the COVID-19 pandemic.

Meanwhile, fixed-asset investment, a key indicator of infrastructure spending, grew by 5.1 percent in the first quarter of 2023, slightly lower than analysts’ expected gain of 5.7 percent, but still indicating steady investment activity in the country.

The release of these economic indicators coincided with the announcement that China’s Gross Domestic Product (GDP) grew by 4.5 percent in the first quarter of 2023 compared to the same period last year. This exceeded analysts’ expectations of around 4 percent growth, and marked the strongest expansion since the first quarter of 2022. This positive GDP growth was seen as a sign of resilience in China’s economy, especially after the Chinese government’s decision to end the zero-covid policy which had been in place for three years and had a significant impact on the economy in the past.

China’s GDP growth in 2022 was only 3 percent, falling short of the 5.5 percent target set by the government. However, the first quarter of 2023 showed a more optimistic start for the year, with the government targeting a GDP growth of around 5 percent for the full year.

Global financial markets closely monitor China’s GDP figures as the country is a major driver of the global economy. The strong performance in retail sales, industrial production, and GDP growth in the first quarter of 2023 is expected to boost confidence in China’s economy and contribute to the global economic recovery.

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