The Chinese economy expanded by 6.8% in the first three months of 2018 compared with the same quarter last year.
The growth rate in the January to March period was slightly higher than forecast and beat Beijing’s annual growth target of “around 6.5%”. It also marked the third-consecutive quarter of 6.8% annual growth.
The economy was lifted by robust household spending and government investment in infrastructure.
Exports were robust in the first quarter, with Chinese shipments to the US up by 14.8% compared to the year before.
According to Reuters, some analysts believe that the sharp increase in exports to the US may be related to the threat of higher US tariffs in the future.
Haibin Zhu, chief China economist at JP Morgan in Hong Kong, told Reuters:
“We don’t expect (the U.S.-China tensions) will evolve into a full-scale trade war, but we also argue this uncertainty will not disappear and we expect a bumpy road of negotiations. In terms of the impact of potential tariffs, it is pretty limited, particularly this year,”
Mr Zhu added:
“Even in the worst scenario that both countries start to implement the $50 billion tariffs, we’re talking about a few tenths of a percentage point and most likely it will only start to affect the economy late this year and in 2019,”
Official figures need to be taken “with a grain of salt”
Julian Evans-Prtichard, senior China economist at Capital Economics, was quoted by the BBC as saying that the official figures “need to be taken with a grain of salt” as they have been “implausibly stable in recent years”.
He added, “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.”