China GDP Growth Beats Estimates In Q1


The Chinese economy expanded 6.9 percent year-on-year in the March quarter of 2017, compared to a 6.8 percent growth in the fourth quarter 2016 and slightly above market consensus of a 6.8 percent growth. It was the strongest expansion since the September quarter 2015, supported by faster rises in industrial output, retail sales and fixed-asset investment while fiscal spending surged.

From January to March 2017, non-farm fixed asset investment rose 9.2 percent year-on-year to 937.77 billion yuan, following a 8.1 percent rise in January to February and beating market expectations of a 8.8 percent increase. It was the strongest growth since May 2016, as investment from state firms jumped 13.6 percent while investment from the central government fell 7.1 percent. Domestic-funded investment increased 10.0 percent while foreign one went up 0.3 percent. Investment in underway projects jumped 21.7 percent while in new ones it shrank 6.5 percent.

Government spending rose 21 percent compared to the same period a year earlier while revenues went up 14.1 percent.

In March, industrial production increased by 7.6 percent year-on-year, compared to a 6.3 percent rise in January-February 2017 while market expected a 6.3 percent rise. It was the fastest growth since December 2014, as output expanded at a faster pace for: manufacturing (8.0 percent from 6.9 percent in the prior month) and electricity, gas and water production (9.7 percent from 8.4 percent). In contrast, mining production fell (-0.8 percent from -3.6 percent).

Retail sales rose 10.9 percent year-on-year in March of 2017, following a 9.5 percent increase in the previous period and above consensus of a 9.6 percent rise. It was the fastest increase since December 2016, as sales rebounded for automobiles (8.6 percent from -1.0 percent in the prior month). Also, sales went up at a faster pace for: garments (6.4 percent for 6.1 percent), home appliances (12.4 percent from 5.6 percent), office supplies (17.2 percent from 13.4 percent), furniture (13.8 percent for 11.8 percent), telecoms (11.6 percent from 10.7 percent) and building materials (17.8 percent from 12.9 percent). Sales increased less than in a month earlier for: cosmetics (8.7 percent from 10.6 percent), jewellery (7.2 percent from 8.2 percent), personal care (7.1 percent for 9.2 percent); oil, oil products (11.3 percent from 14.0 percent).

Figures released earlier showed exports increased by 16.4 percent year-on-year to USD 180.6 billion in March 2017, rebounding from a 1.3 percent drop in the prior month and much higher than market estimates of a 3.2 percent rise. Considering January to March 2017, outbound shipments rose 8.2 percent from the same period a year earlier. Imports went up 20.3 percent year-on-year to USD 156.68 billion, compared to a 38.1 percent growth in February and above consensus of an 18 percent rise. From January to March 2017, purchases jumped 24 percent from a year earlier.

Considering the first three months of 2017, final consumption accounted for 77.2 percent of the Chinese economy. Meanwhile, investment contributed 18.3 percent of growth and net exports accounted for a 4.5 percent of the GDP.

For 2017, the Chinese government expects the economy to grow by around 6.5 percent; compared to a 6.7 percent expansion in 2016, which was the slowest growth in 26 years. While officials have vowed to push ahead with reforms, the central bank has moved to a tighter monetary policy bias and has hiked short-term interest rate several times so far this year. Regarding investment in property, about a dozen cities have applied tighter restrictions on purchases to curb a speculation.

On a quarterly basis, the economy advanced 1.3 percent in the first quarter 2017, slowing from a 1.7 percent growth in the previous three months and missing market estimates of a 1.6 percent growth. It was the weakest expansion since the March quarter 2016.


National Bureau of Statistics l Rida Husna | rida@tradingeconomics.com
4/17/2017 6:32:38 AM