The Chinese economy experienced a stronger growth than anticipated in the first three months of 2024, bringing relief to the nation grappling with a real estate crisis, escalating debts of local governments, and sluggish consumer spending.
According to the Chinese National Bureau of Statistics, the Chinese economy expanded by 5.3 percent year-on-year in the first quarter, compared to 5.2 percent growth in the fourth quarter of 2023.
The Chinese government aims for an approximately 5 percent growth in the economy for 2024, a target viewed as ambitious by many analysts. The growth rate of over 5 percent in 2023 was largely attributed to the absence of COVID-19 restrictions.
In addition to the real estate crisis, rising government debts, and weak consumer spending, concerns loom over potential deflationary pressures in China in the coming year, which could further dampen economic growth.
The challenges in the Chinese real estate market, where many heavily indebted property developers are facing difficulties, exert the most significant pressure on the economy.
In March, the prices of new homes experienced a 2.2 percent year-on-year decline, marking the largest drop since August 2015 and the ninth consecutive month of price declines.