Business

China’s economy grew at faster-than-expected 6.8% in Q1

BEIJING: China's economy grew at a slightly faster-than-expected pace of 6.8 per cent in the first quarter, buoyed by strong consumer demand, healthy exports and robust property investment.

Resilience in the world's second-largest economy will likely help keep a synchronised global recovery on track for a while longer, even as China faces rising trade tensions with the United States that could impact billions of dollars in business.

But economists still expect China will lose some momentum in coming quarters as Beijing forces local governments to scale back infrastructure projects to contain their debt, and as property sales cool further due to strict government controls on purchases to fight speculation.

Consumption, which accounted for almost 80 per cent of economic growth in the first quarter, played a significant role in supporting the economy even as risks grew for Chinese exporters.

March retail sales rose 10.1 per cent from a year earlier, slightly more than expected and the strongest pace in four months, with consumers buying more of almost everything from cosmetics to furniture and home appliances.

"The retail sales data tells you a lot about consumption. It is not seasonal - if you look at growth in cosmetics, spending on clothing, spending on automobiles, there has been a persistent trend for a few months," said Ms Iris Pang, Greater China economist at ING in Hong Kong.

"Consumption is really strong, there is strong wage growth in urban areas. We underestimated the power of consumption in China." - REUTERS

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