Saudi Press

Saudi Arabia and the world
Tuesday, May 21, 2024

China's Economy Surges Ahead with 5.3% Q1 Growth, Boosted by High-Tech Manufacturing

China's Economy Surges Ahead with 5.3% Q1 Growth, Boosted by High-Tech Manufacturing

China's economy grew faster than anticipated in the first quarter of 2023, with a Gross Domestic Product (GDP) increase of 5.3% compared to the same period last year.
This surpassed the predicted 4.6% growth in a Reuters poll of economists.

Industrial production also rose by 6.1%, driven primarily by high-tech manufacturing.

Sheng Laiyun, a spokesperson for the National Bureau of Statistics, expressed optimism about the strong start but acknowledged that economic stability and improvement foundations are not yet secure.

China's manufacturing sector experienced a 40% increase in production of 3D printing equipment, electric vehicle charging stations, and electronic components compared to the previous year.

This comes after China's official manufacturing purchasing managers' index (PMI) and the Caixin/S&P manufacturing PMI both showed expansion for the first time in six months.

Overseas demand was a significant contributor to this growth.

Despite setting an ambitious 5% annual growth target for 2024, consumer and business confidence remain weak, and the real estate sector is in a prolonged downturn.

The Chinese authorities have responded by cutting interest rates and increasing central government spending to support infrastructure investment.

Retail sales grew by 4.7% in the first quarter, driven by spending on sports and entertainment, cigarettes and alcohol, and catering services.

China's investment in fixed assets, including factories, roads, and power grids, grew by 4.5% in the first quarter of 2023.

However, this growth was mainly driven by state-owned enterprises, which increased their investment by 7.8%.

Private sector investment only grew by 0.5%, and investment by foreign companies decreased by 10.4%.

Despite these challenges, Beijing has prioritized reviving economic growth and has been trying to attract more foreign investment.

Chinese leader Xi Jinping recently met with US CEOs and academics to encourage them to continue investing in China.

China's economy grew by 5.2% in 2023, which was an improvement from the previous year's 3% growth but still one of the worst performances in over three decades.

The text reports a decline in foreign direct investment (FDI) in China due to several reasons.

These include slower economic growth, increased regulatory measures, national security legislation, and uncertainty about China's future prospects.

The combination of these factors has led to a decrease in confidence among investors regarding China's economy.

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