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April 18, 2017

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Economy on course for recovery

CHINA’S economic growth exceeded market expectations in the first quarter with a number of indicators showing improvement to set a sound foundation for economic recovery.

China’s GDP rose 6.9 percent year on year, the fastest in 18 months, National Bureau of Statistics data showed.

That compared with the 6.8 percent increase in the previous quarter and a 6.7 percent increase for the whole of last year.

The market had been expecting a 6.8 percent rise for the January to March period.

“China’s economy extended a stable and sound development in the first quarter, setting a solid foundation to achieve the official target (of 6.5 percent) for the year,” said the bureau’s Mao Shengyong. “The economy shows a good pattern that can be characterized as growth speed recovering, prices generally stable, employment expanded, and international payment improved.”

He said more effort is needed to consolidate the positive outlook concerning the complicated international environment and conflicts in domestic structural reforms.

Yesterday’s data also showed consumer goods sales rising 10.9 percent year on year in March, 1.4 percentage points faster than in the first two months.

Consumption contributed to 77.2 percent of GDP in March, up 2.2 percentage points over the same period last year.

China’s value-added industrial output, an important economic indicator, expanded 6.8 percent year on year in the first quarter, compared with a 6.3 percent increase in the January to February period.

Fixed asset investment soared 9.2 percent in the first three months against market expectations of 8.8 percent.

Of the total FAI, 21 percent was derived from the property sector, reaching its highest level in two years.

Sales of residential property in terms of area rose 16.9 percent in the first quarter, while sales of commercial property jumped 25.1 percent.

“The economic indicators released today are very encouraging,” said Liu Dongliang, an analyst with the China Merchants Bank.

“Consumption, investment, real estate and industrial production all exceeded market expectations, indicating strong momentum in economic recovery. There is almost no bad news concerning the first quarter data.”

The real estate market wasn’t affected by purchase restrictions as much as the market expected, and will continue to support the second quarter economy, Liu said.

Other major indicators also indicated a resilient economy.

China’s disposable income per capita stood at 7,184 yuan in the first three months, an increase of 7 percent once inflation has been taken into account.

In the jobs market, 3.34 million new jobs were created and the surveyed unemployment rate stayed under 5 percent.


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