China economic growth accelerates to 5% in first quarter, beating expectations
CNBC • • general
Key Points:
- China's GDP grew 5% in Q1 2026, surpassing forecasts and accelerating from 4.5% in the previous quarter, driven primarily by strong export growth despite weak domestic demand.
- The government set a conservative growth target of 4.5% to 5% for 2026, reflecting concerns over slowing demand and ongoing trade tensions with the U.S.
- Industrial production rose 6.1% year-on-year in Q1, outpacing retail sales growth of 2.4%, highlighting manufacturing as the main growth driver amid subdued consumer spending.
- Export growth surged 14.7% in Q1 but slowed sharply to 2.5% in March due to rising energy and logistics costs linked to the Iran war, which also caused factory-gate prices to rise for the first time in over three years.
- The energy shock and geopolitical tensions pose risks to China’s economic outlook, pressuring global demand and increasing production costs, while policymakers focus on sustaining private consumption and investment rather than further stimulus.
