China’s push into high-tech manufacturing has helped buoy the economy, which registered GDP growth of 5 per cent year-on-year in the first quarter as it braces itself for the impact of the Iran war.
The growth figure exceeded the expectations of analysts surveyed by Bloomberg of 4.8 per cent and the previous quarter’s growth of 4.5 per cent. It was also at the upper end of the government’s target for this year of 4.5-5 per cent. Exports, high-tech manufacturing and fiscal stimulus offset a still weak domestic economy.
The strong start to the year comes as China’s economy is expected to take a hit from the Iran war and rising energy prices, which will alleviate long-running deflationary pressures but compress the already tight margins of its hyper-competitive industrial sector.