China’s Economy Beats Expectations Despite Property Sector Crisis

China’s Economy Beats Expectations Despite Property Sector Crisis

China’s economy has defied expectations by expanding at a stronger-than-expected rate of 5.3% in the first quarter of 2024, compared to a year earlier. This comes as the country grapples with a deepening crisis in its property sector.

The latest data from the National Bureau of Statistics (NBS) also showed a slowdown in first quarter retail sales growth, indicating challenges in China’s consumer confidence. Analysts are now looking towards households to drive growth if China wants to hit its target of around 5% growth.

The property sector, which accounts for around 20% of the economy, continues to face challenges. Property investment fell by 9.5% in the same period, and new home prices saw the fastest decline in over eight years in March.

The crisis in the real estate industry was further highlighted by the recent liquidation of property giant Evergrande and winding-up petitions against other developers in Hong Kong. Credit ratings agency Fitch has also cut its outlook for China, citing increasing risks to the country’s finances amidst economic challenges.

For decades, China’s economy saw rapid growth, but now faces a more uncertain future as it navigates through the ongoing property market crisis. Analysts are closely watching how the country will address these challenges and sustain its economic growth in the coming months.