10 months ago • 2 mins
What’s Going On Here?
Fresh data out on Tuesday showed China’s economy grew faster than expected last quarter.
What Does This Mean?
Last week’s export data hinted that China’s economy was on the upswing, and now Tuesday’s figures have gone and confirmed those high hopes. In March, retail sales saw their biggest gain since June 2021, with a yearly jump of 10.6% – proving the long sought-after bounceback of the domestic economy has begun. Manufacturing investment flexed its muscles too, with a solid 7% rise during the quarter, while factory output revved up as the world’s factory got back in action. And sure, the recovery’s uneven – with private investment and property market segments still lacking – but the overall result was impressive: China’s economy grew 4.5%, outstripping the 4% economists predicted and hitting its fastest pace in a year.
Why Should I Care?
The bigger picture: Strength in numbers.
China's got some way to go to meet its 5% annual growth target, but economists think things will pick up as consumer and business confidence continue to rise. Plus, the all-important property market is showing signs of life, with new home prices in March swelling at their fastest pace in 21 months. Toss in the prospect of additional government stimulus too, and Goldman Sachs sees 6% growth in the cards for China this year.
For markets: The weight of the world.
If China bounces back as energetically as Goldman predicts, it could be a lifeline for global growth, especially with developed economies faltering. And that would be party time for commodities too: when the economy’s booming, the appetite for transportation and energy shoots up, giving oil and gas a boost. And more construction and infrastructure projects mean steel and copper get their time in the spotlight as well – which might explain why regional commodities markets got all fired up when the news broke.
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