The Chinese economy recorded a year-on-year growth of 4.8% in the first quarter, below the target set by Beijing, at a time when the spread of the Corona virus outbreak has besieged important industrial centers.
Growth accelerated from the 4% pace achieved in the previous quarter, when the Chinese government restricted access to credit for the country’s vast real estate sector.
However, growth in the January-March period was below the official target of “about 5.5%”, set by the Chinese Communist Party for this year, which analysts say will be difficult to achieve, unless the government moves. Forward with great motivators. Spending increased in the retail and manufacturing sectors, and investment in factories, real estate and other fixed assets.
“The recovery of the national economy is sustainable and the management of the economy has been generally stable,” Fu Lingwei, a spokesman for China’s National Bureau of Statistics, said in a statement.
However, retail sales, a measure of consumer spending, fell 3.5% in March – the first contraction since July 2020 – as authorities tightened anti-epidemic measures to tackle the country’s most serious outbreak in more than two years.
The data adds pressure to China’s ‘zero cases’ strategy for covid-19 as the economic and social costs mount.
The number of cases in China rose in April, with Shanghai being the epicenter.
The city, which is China’s financial center and home to one of the world’s busiest ports, remains largely isolated, with its 25 million residents banned from leaving their homes.
The outbreak erupted at an uncertain time for the Chinese economy, following the real estate debt crisis, during the second half of 2021.
The 5.5% target for 2022 is the lowest in three decades.
Fu Linghui cited “recurrent outbreaks” of Covid-19 in China and an “increasingly dangerous and complex international environment”.
“With the increasing complexity and instability of the domestic and international environment, economic development is facing great difficulties and challenges,” he said.
The data for the first three months of the year does not express the impact of the Shanghai lockdown.
Analysts at Japanese financial services group Nomura estimated last week that 45 cities, which account for 40% of China’s gross domestic product (GDP), are undergoing full or partial containment measures, and added that the country was “at risk of entering a recession.”
Industrial production, which was a big driver of China’s early recovery from the epidemic in 2020, rose 5% in March compared to the same month a year earlier.
Investment in fixed assets increased by 9.3% in the first three months of 2022 year-on-year.
In recent weeks, Chinese Premier Li Keqiang has repeatedly warned of economic risks. Chinese President Xi Jinping, in March, also noted the need to reduce the economic impact of anti-epidemic policies.
In addition to Shanghai, the cities of Jilin and Changchun, two important industrial centers in northeastern China, have been under complete lockdown for more than a month.