Strong exports of electrical and mechanical products supercharged China’s economy in the first three months of the year, with growth exceeding analysts’ expectations even as the Iran war upended global trade and energy markets.
But officials warned of “volatile” external conditions ahead, as the conflict in the Middle East weakens global demand and threatens China’s export reliant economy.
On Thursday, China’s National Bureau of Statistics (NBS) reported a 5.0% increase in Gross Domestic Product from the same period last year. It marked an acceleration from the 4.5% growth reported in the final quarter of last year.
The NBS hailed the “solid start,” while cautioning against domestic and international headwinds.
“External conditions have become more complex and volatile, while structural imbalances at home – marked by strong supply and weak demand – remain pronounced,” Mao Shengyong, deputy commissioner at the NBS, said at a Thursday press conference.
China is the first major economy to report first-quarter GDP figures after the United States and Israel launched a war against Iran in late February.
Already, the economic data released on Thursday is offering a glimpse into how the impact of that war is rippling through the global economy.
Skyrocketing energy prices have increased the costs for raw materials and caused inflation. This could further squeeze Chinese consumers, who are already spending less because of a prolonged real estate crisis that began in 2021.
Export reliance
China has relied on its manufacturing prowess to fuel its export-reliant economy, which boosted its trade surplus to a record-breaking level of 1.2 trillion last year.
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