China Q1 growth surprise

China’s economy grew 5.0% in the first quarter, faster than expected and up from 4.5% in the final quarter of 2025. (stats.gov.cn) The National Bureau of Statistics said gross domestic product reached 33.42 trillion yuan in January through March, with services up 5.2%, industry up 4.9% and agriculture up 3.8%. CNBC reported economists polled by Reuters had expected 4.8% growth. (stats.gov.cn) (cnbc.com) Factory activity helped carry the quarter. Industrial output rose 5.7% in March and 6.1% for the first three months of the year, with electronics output and transport equipment among the stronger categories. (stats.gov.cn) Consumer spending remained softer. Retail sales rose 1.7% in March and 2.4% in the first quarter, while online retail sales of goods and services increased 8.0% to 4.98 trillion yuan. (stats.gov.cn) The mix matters because Beijing entered 2026 with a lower annual growth target of 4.5% to 5%, the weakest official goal since the early 1990s outside the pandemic year with no target. A 5.0% first quarter puts growth at the top end of that range early in the year. (cnbc.com) (stats.gov.cn) It also gave the central bank room to wait. China left the one-year loan prime rate at 3.1% and the five-year rate at 3.6%, keeping borrowing benchmarks unchanged as stronger data reduced pressure for an immediate cut. (cnbc.com) The weak spots did not disappear. Fixed-asset investment rose 1.7% in the first quarter, but private investment fell 2.2%, and real-estate investment dropped 11.2% to 1.77 trillion yuan. (stats.gov.cn 1) (stats.gov.cn 2) The statistics bureau said the external environment had become “more complex and volatile,” while CNBC said officials were still pointing to an “acute” imbalance between strong supply and weak demand. That leaves China with firmer headline growth, but still leaning on factories and exports more than households and property. (cnbc.com) (stats.gov.cn)