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China's first quarter growth beats expectations at 6.8%


Nantong port in China's eastern Jiangsu provinceImage copyright
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China’s economy grew 6.8% between January to March according to official data, slightly beating forecasts for the period.

The growth rate compares expansion with the same three months in the previous year.

The latest GDP figures are also above Beijing’s 2018 annual growth target of “around 6.5%”.

The data shows resilience in the world’s second largest economy, helped by strong consumer demand.

But concerns about China’s economy – including rising debt levels – remain.

The government has been fighting to contain ballooning debt and a housing bubble without hurting growth.

Amy Zhuang, China economist at Nordea Bank in Singapore described the first quarter growth figures as “solid” but also said there are signs that the positive momentum is weakening, likely due to the cooling housing market.

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China wants to boost domestic consumption to drive growth

The growth figures come amid concerns about China’s outlook for exports which has been clouded by rising tensions with the United States, its largest trading partner.

Chinese growth data through 2018 will be closely watched for any impact of tariffs proposed by the US.

Many China watchers advise caution with China’s official GDP numbers.

Julian Evans-Prtichard, senior China economist at Capital Economics said the official figures “need to be taken with a grain of salt as they have been implausibly stable in recent years”.

“While we don’t think China’s economy is expanding as rapidly as the official figures claim, there is broader evidence to suggest that a recovery in industry did prevent growth from slipping too much last quarter.”



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