China’s economy beats forecasts with 5.4% growth

CGTN Europe

China has outperformed economic growth expectations for the quarter with its GDP increasing 5.4% from a year earlier.  CGTN’s Li Jianhua breaks down this financial news.

Transcript

00:00Let's talk to our correspondent Li Jianhua, who's been following the story.

00:03Well, a rare bit of good financial news. What's driving these figures?

00:08Jamie, 5.4% is better than expected by a lot of analysts.

00:13It's slightly higher than the average national target of GDP growth of China is 5%.

00:19Chinese authorities said this morning that it is off to a good and steady start this year.

00:25The main reason, of course, is because of the United States tariffs and exporters are front-loading their shipments to the United States.

00:31So in February, the tariffs on Chinese imports were 10%, so that it shot up to 20% in March.

00:39So for a lot of the exporters, it's now, either now, with 20% or later, higher, which is now about 145%.

00:47And according to the Customs Administration, China's exports in the first quarter rose by nearly 6%.

00:54Of course, there are a lot of other numbers.

00:56Some of the most important ones, apart from the headline figure of GDP, include retail sales.

01:02It's increased by nearly 6% in the first quarter, largely because of the trading policy.

01:07And fixed assets investment also rose by 4.2%.

01:11It's an indicator of businesses' confidence in the economy.

01:14And, of course, the National Bureau of Statistics released a statement saying the external environment is becoming complex and severe,

01:24and they're hoping there will be more proactive macro policies.

01:29If these figures are in part, as you say, to front-loading before Trump's tariffs kick in,

01:35presumably the future looks a little more glum.

01:38You know, that really depends on its hinges on China-U.S. trade talks,

01:44and the United States is still the third-large trading partner of China.

01:48Ever since the trade war started between the two countries in 2018,

01:52the share of China's exports to the United States dropped from 19% in 2018 to 15% to about 15% in 2024.

02:01So, what China has been doing includes, for one thing, diversifying its export markets for another,

02:09that is, tapping to the potential of the domestic market.

02:14So, ASEAN is the largest trading partner of China ever since the trade war started.

02:19Chinese President Xi Jinping is now in Malaysia on a three-nation tour.

02:24And hours ago, they have announced the conclusion of the negotiation of a new free trade agreement

02:30between China and ASEAN countries.

02:32Domestic market-wise, China's e-commerce platforms have pledged to help those traditional exporters

02:38to sell their products online.

02:40JD.com pledged to buy at least 27 billion U.S. dollars worth of products from these exporters.

02:46But the problem is, the domestic amount is still quite weak.

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