China has started the bike again.
The second largest economy on the planet has grown by 4.5% year-on-year in the first quarter of the year, above many forecasts, according to official estimates published this Tuesday by the National Statistics Office (ONE).
The data reflects a country that has changed its face after three years almost locked in a bubble and after a more than limping 2022 marked by the effect of closures, confinements and other pandemic constraints.
Last year, the Gross Domestic Product increased by 3%, the second worst data in more than four decades.
Consumption and exports have played a key role in the rebound.
But the Asian giant is still showing contradictory signs of recovery, with the shadow of the global economic storm always in the background, and unemployment figures still above the pre-pandemic era, so Beijing's optimism is contained.
"The national economy has had a good start," says the note published by ONE.
But Fu Linghui, spokesman for this body, has mentioned several of the pending challenges in a speech: "The international environment continues to be complex and changing, the limitations derived from insufficient domestic demand are evident and the foundations of economic recovery are not solid ”, according to Reuters.
The data for the first quarter, in any case, is above that of the last three quarters and represents an increase of 2.2% compared to the last quarter of 2022, which was marked, towards the end, by a tsunami of infections of covid like never before in China.
The positive signs are there, such as total retail sales of consumer goods, which increased by 10.6% year-on-year, 7.1 percentage points more than in the first two months of the year, according to data from this Tuesday ( partially due to a statistical effect, starting from a low base).
Some indicators published in recent days were already pointing to an improvement, such as global exports, which grew by 14.8% compared to the previous year, mainly driven by shipments to Southeast Asia (although analysts believe that in part due to the exit of many pending orders) or that of new housing prices, which rose in March at the fastest rate in 21 months.
The added value indicator of industrial production has also improved in the month of March;
while, during the first quarter, the growth of investment in fixed assets, infrastructure and manufacturing has moderated, and investment in real estate development has fallen even more (to -5.8% year-on-year), according to the calculations made by the economic magazine
Caixin
.
In Beijing's skyscraper-strewn financial district, the feeling is that things are getting better after the pandemic, although there is still a long way to go.
“The market is recovering, but it takes time,” says Dong, 31, a worker at a multinational real estate company, as he finishes a coffee with an office mate.
In his office, things have gone really bad in recent years, but many, like him, trust that the battery of measures put in place by the Government will take effect in the coming months.
“During the pandemic, many were having trouble keeping jobs.
But with the reopening, they are now willing to improve their housing conditions”, adds Zheng, 46, who works in the same sector, and has a coffee in the shop across the street.
"People's lives are improving", she assesses her over these last few months.
"Demand and purchasing power are growing."
She is even thinking of moving to a bigger house.
Not everyone is so optimistic.
At the foot of one of the glass towers, an investment lawyer who prefers to remain anonymous assures that things "have not yet returned to their normal state" and that she does not feel that the economy is "recovering" at the moment.
Most of her clients are foreign investors and lately, she adds, she doesn't have much work.
“I think everyone is waiting,” she says as her cab pulls up.
"After the downturn in the economy, people are cautious with their money and lack confidence."
The hole, in her opinion, could last for months.
The data announced this Tuesday puts Beijing on the path of 5% that was set as the growth horizon for 2023 during the recent meeting of the National People's Assembly (the Chinese legislature), the March conclave in which the last political changes in the country.
During the meeting, President Xi Jinping was re-elected to a historic third term, cementing his power over all sectors of the country, and a new government of loyalists was formed, including the new prime minister (Li Qiang, a former Party strongman). Communist in Shanghai, the financial square) and the new deputy prime minister in charge of economic affairs (He Lifeng, until now at the head of the National Development and Reform Commission, the agency in charge of planning).
At the end of the parliamentary session, the prime minister established "high-quality development" as a priority, based on scientific and technological innovation.
And he assured that the solution to achieve the goal set to create nearly 12 million jobs by 2023 is "in economic development."
“The growth target has become less relevant [for Beijing] while employment has become key,” Alicia García Herrero, chief Asia Pacific economist at Natixis, a French investment bank, interprets in a recent analysis.
In it, he stresses that there are still strong obstacles to growth "especially from weak external demand", an essential element for the great exporting power.
Beijing is aware that geopolitical turbulence, low growth in many of the major economies, inflation that runs through the globe like an electric current, and instability associated with trade wars and other decoupling risks will pose problems throughout the year.
The volume of world merchandise trade is expected to grow by just 1.7% this year, after growth of 2.7% in 2022, according to the latest forecasts from the World Trade Organization.
"Unemployment remains stubbornly above pre-pandemic levels," Trivium China analysts pointed out as one of the main challenges for Beijing in a recent bulletin, and mentioned the most worrying data: the lack of work among workers. youths.
Urban unemployment in the first quarter stands at 5.5% and reaches 19.6% among people aged 16 to 24, when at the beginning of 2019 the latter was around 11%.
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