Chinese economy grows 4.5 percent year on year in Q1

A visitor takes photos in the Nanjing Botanical Garden, March 13, 2023. (People's Daily Online/Su Yang)

China's GDP reached 28.5 trillion yuan (about $4.14 trillion) in the first three months this year, up 4.5 percent year-on-year or an increase of 2.2 percent compared with the fourth quarter of 2022, according to data released by China's National Bureau of Statistics (NBS) on Tuesday, April 18.

China's national economy made a good start this year, said NBS Spokesperson Fu Linghui at a press conference.

Fu, also director general of the Department of Comprehensive Statistics of the NBS, explained that as the country has achieved a smooth transition in COVID-19 response and front-loaded the policies to stabilize growth, employment and commodity price, it has accumulated more positive factors.

The Chinese economy enjoyed strong impetus for development in terms of consumption, investment and export.

Since this year, the country's policies to promote consumption have produced continuous effects, and the market saw a prominent rebound, Fu noted, adding that consumption has played a more important role in driving economic growth.

According to Fu, final consumption contributed 66.6 percent to the country's economic growth in the first quarter, higher than the whole-year figure in 2022 and the largest driver of economic growth.

As the diminishing impacts from COVID-19 expand consumption scenarios, transport, catering, entertainment and tourism consumption saw rapid growth. In the first three months of this year, the revenue of China's catering industry saw a year-on-year uplift of 13.9 percent.

Vessels navigate along the Yangtze River in Quyuan township, Zigui county, Yichang, central China's Hubei province, April 16, 2023. (People's Daily Online/Wei Qiyang)

In the first quarter, China's fixed-asset investment went up 5.1 percent year-on-year, playing a positive role in driving economic growth. Manufacturing investment saw a 7 percent expansion, maintaining a sound momentum for growth and obviously higher than the growth of overall investment. In particular, investment into high-tech manufacturing sectors expanded by 15.2 percent.

Since this year, regions across the country have worked actively to advance infrastructure construction. In the January-March period, infrastructure investment increased by 8.8 percent year-on-year, laying a solid foundation for future development.

"Investment has been on a steady trajectory of growth this year, with a continuously optimized structure, which is conducive to promoting economic growth and long-term development," Fu said. According to him, China will focus more on improving the quality of investment and further stabilize non-state investment.

China has vigorously pursued more stable and higher-quality foreign trade and actively expanded trade with emerging markets and developing countries along the Belt and Road.

In the first quarter, the country's total foreign trade increased 4.8 percent year-on-year. In particular, exports went up 8.4 percent upon a high aggregate last year. Its trade with Belt and Road Initiative (BRI) partners grew 16.8 percent, and that with other members of the Regional Comprehensive Economic Partnership (RCEP) grew 7.3 percent, with a 20.2 percent rise in exports.

Fu said China's growth was a hard-won result given the slowing economic growth of the world and external uncertainties. China's foreign trade has maintained its strong resilience and vitality despite pressure and challenges, and it is possible for the country to achieve its goal of stabilizing foreign trade and improving its quality this year with stabilizing policies, he remarked.

China's economy has maintained a sound momentum for growth this year, which lays a solid foundation for the country to reach its annual development goals, Fu told the press conference.

The 2023 Nanjing Jiangning University Town Half Marathon starts at the Jiangning University Town Sports Center, with over ten thousand marathon enthusiasts running amid the mountains and rivers, experiencing the fun of running, April 9, 2023. (People's Daily Online/Fang Dongxu)

The country is witnessing a gradually increasing endogenous momentum for development, and is expected to embrace better economic recovery this year, he said.

Responding to the so-called deflation worries, Fu noted that deflation refers to a continuous fall in the general price level, often accompanied by reduced money supply and economic recession.

"Generally speaking, deflation is not occurring in China," Fu said, citing a mild uptick in the consumer price index, rapid growth in the money supply and a fast economic rebound.

The spokesperson attributed the eased CPI growth rate in Q1 to a drop in food and energy prices, and a decline in automobile prices, among others.

"Market supply and demand remained generally stable. For the next stage, the prices will recover steadily and there will be no deflation concerns in China," he said.

At present, the international environment remains complicated and the global growth is slow, Fu said, adding that there are many unstable and uncertain factors. China is seeing sound economic recovery, but is still restricted by insufficient demand and prominent structural problems. It still needs to consolidate the foundation for economic recovery.

Fu noted that China will keep acting on the general principle of pursuing progress while ensuring stability, promote a full economic recovery, and effectively pursue higher-quality growth and appropriately increase economic output, so as to set the stage for building a modern socialist country in all respects.

People visit a tourist site in Yangzhou, east China's Jiangsu province, April 12, 2023. (People's Daily Online/Meng Delong)