The Chinese economy sprang back to life in the first quarter, shortly after the country let down its guard on the "zero-COVID-19" policy.
On Way To Trend-Like Growth: The Chinese economy grew by 4.5% year-over-year in the first quarter of 2023, according to preliminary estimates released by the National Bureau Of Statistics on Tuesday.
Real GDP, adjusted for prices, climbed 4.5% to 28.5 trillion yuan ($4.2 trillion), faster than the 2.9% growth reported in the fourth quarter, which suffered due to intermittent shutdowns in the wake of COVID-19 recurrences.
The first-quarter growth marked the fastest in a year.
On a quarter-over-quarter basis, first-quarter GDP was up 2.2%.
The services sector accelerated the most in the first quarter, rising 5.4% year-over-year, and accounted for about 58% of the GDP. The primary sector which encompasses agriculture and allied activities, climbed by 3.7% and the industrial sector grew by 3.3%.
Among the other components of the economy:
- Retail sales climbed 5.8% in the first quarter versus a 2.7% decline in the fourth quarter.
- Online retail sales outperformed with 7.3% growth and accounted for 24.2% of the total retail sales.
- Fixed asset investment, excluding rural households, rose by 5.1%, the same pace as in the year-ago period
- The trade balance was in a surplus of $1.41 trillion yuan, as export growth of 8.4% outpaced import's 0.2% increase
- Pricing remained in check, with consumer prices and core consumer prices rising at benign rates of 1.3% and 0.8%, respectively, and producer prices were down 1.6%
The national economy showed a steady recovery and made a good start, the NBS said, adding that the COVID-19 prevention and control shifted to a new phase and measures were taken to stabilize growth, employment and prices.
![](https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/04/18011605/statistic_id271769_quarterly-gross-domestic-product-gdp-growth-rate-in-china-q4-2019-q4-2022-1.png)
See Also: Best Chinese Stocks
Companies That Can Feed Off Strength: China is a key market for many multinational companies such as Apple, Inc. AAPL, Tesla, Inc. TSLA and Nvidia Corp. NVDA.D
Apple heavily depends on China for its products, despite its efforts to move its manufacturing elsewhere. In addition, the company earns a large portion of its revenue from China. In the fiscal year 2022, the Greater China region, which includes mainland China, Hong Kong, Taiwan, and Macau, accounted for 19% of Apple’s total revenue.
For EV pioneer Tesla, China supplies a little over half of its annual production and more importantly, the cars produced by the Giga Shanghai factory come with higher margins due to the lower cost of manufacturing involved. China is also a key market for its EVs.
China's robust growth should also bode well for homegrown e-commerce giant Alibaba Group Holding Limited BABA and its smaller peer JD.com, Inc. JD. First-quarter retail sales data released by NBS showed online sales growth outpacing the overall retail sales growth. The proportion of online sales to total sales has also been rising.
For chipmakers such as Nvidia and AMD AMD, China is a lucrative market for their powerful chips due to the buzzing manufacturing activity in the country. Despite the U.S. crackdown on China chip exports, these companies are doubling down on the export of their hardware and software to the country.
The iShares MSCI China ETF MCHI, an exchange-traded fund that tracks the performance of Chinese equities, ended Monday’s session up 2.09% at $49.86, according to Benzinga Pro data
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.