The economy continued to defy fears of a slowdown in Q1, with GDP expanding 6.8% annually for the third consecutive quarter. Strong private consumption and robust real estate and service investments were behind the resilient growth. While exports remained upbeat due to healthy global demand, vigorous domestic demand prompted imports to surge, diminishing the external sector’s overall contribution to growth. Slower credit growth and lower property sales in March signal that domestic demand will likely cool in Q2. Moreover, trade disputes between with the U.S. are clouding the outlook for the all-important external sector. On 23 March, China decided to retaliate with tariffs on 128 U.S. products worth about USD 3 billion in response to levies on aluminium and steel. While President Xi Jinping adopted a more conciliatory tone in April, officials stated that China will strike back against any punitive measure.

China Economic Growth

With the much-needed economic rebalancing coming alongside resilient growth, the economy appears to be in a sweet spot. That said, downside risks include a cooling housing sector, ongoing financial deleveraging and a potential trade war with the United States. Panelists forecast the economy will grow 6.5% in 2018, which is unchanged from last month’s forecast. In 2019, the economy is seen growing 6.3%.

GDP-Inflation-CPI and Interest Rate

附件:

1. China Economy 2018 - GDP-Inflation-CPI and Interest Rate.pdf (236 KB)