China’s gross domestic product (GDP) grew 4.5% in the first quarter of 2023, driven by increased consumption and retail sales, as authorities lifted the “zero-COVID” strategy. The growth rate in GDP from January to March outpaced the previous quarter, according to government data released on Tuesday. The rebound in consumption was driven by people returning to shopping malls and restaurants after harsh COVID-19 restrictions were lifted. The total retail sales of consumer goods in March increased by 10.6% year on year, indicating an upward trend in the economy. The industrial production output grew by 3.9% in March compared to the same period last year. Furthermore, fixed-asset investment rose by 5.1% in the first quarter of 2023.
The Chinese government had set this year’s economic growth target at “around 5%.” China’s central bank kept rates on its one-year policy loans unchanged, and it has vowed to step up support for the economy and maintain ample liquidity to support growth. However, authorities cautioned that China may face import and export pressures in the coming months due to an uncertain international economic environment. They also warned of inadequate domestic market demand in the world’s second-largest economy. Investors are expected to scrutinize China’s economic data to monitor indicators of recovery following years of harsh lockdowns and crackdowns on the industries such as technology and real estate.