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China economy stabilised in first quarter as stimulus took hold
[BEIJING] China's economy stabilised last quarter as the property sector rebounded, markets steadied, and loose monetary policy helped spur an improvement in factory conditions.
Gross domestic product rose 6.7 per cent in the first quarter from a year earlier, the statistics authority announced Friday, meeting the median projection of economists Bloomberg surveyed and in line with the government growth target of 6.5 per cent to 7 per cent for the full year.
Industrial output, fixed-asset investment and retail sales all picked up in March.
Signs of stabilisation in the world's second-biggest economy and bets on a subdued pace of US monetary tightening have helped spur rallies in oil, metals and global equities in recent weeks.
Whether China continues to recover, or resumes its slide toward slower growth, may depend on how much oomph is left from prior easing and if more is on the way.
"We continue to expect a cyclical improvement as past stimulus measures are still filtering through to the economy," Morgan Stanley economist Sun Junwei wrote in a report ahead of the release.
Industrial output expanded 6.8 per cent in March from a year earlier, compared to the median forecast of 5.9 per cent and 5.4 per cent in the first two months of the year.
Retail sales rose 10.5 per cent from a year earlier in March, compared to an estimate of 10.4 per cent.
Fixed-asset investment jumped 10.7 per cent in the first three months from a year earlier, compared to the forecast of 10.4 per cent and 10.2 per cent in the first two months.
China has been making the transition away from heavy industries to a services-led and consumption-driven economy, creating new winners in startups and media and losers in fading industries like coal and steel.
The government is seeking to reduce overcapacity at heavy industrial plants without derailing the economy or slashing too many jobs.