China’s US$12 trillion economy maintained a steady 6.8 per cent expansion in the first quarter, but its prospects are darkened by an investment slowdown at home and a looming trade war with the United States.
Gross domestic product growth has now been stable between 6.7 and 6.9 per cent for 11 quarters, according to data released by the National Bureau of Statistics on Tuesday.
Consumption contributed to 77.8 per cent of first-quarter growth, far exceeding investment and exports, according to the bureau.
Output in the service sector accounted for 56.6 per cent, beating industrial production and agriculture.
Fixed-asset investment, a traditional pillar of growth, rose 7.5 per cent year-on-year in the January to March period, slowing from 7.9 per cent in the first two months, while property investment growth reached a three-year high of 10.4 per cent in the quarter.
“The bright spots lie in the expansion of the service sector and strong consumption, including domestic spending in the festive season and from inbound tourists,” said Iris Pang, chief Greater China economist of ING in Hong Kong
“There are still much-needed projects for investment, such as water management and transport networks, although the government has halted some projects to prevent local debt pile-ups,” she said.
The first-quarter data, however, did not factor in the threat of a trade war between Beijing and Washington, which escalated at the end of March, she said.