By Blessing Nweke
China’s economy expanded faster than anticipated in the first quarter of the year, defying mounting global uncertainty triggered by the ongoing US-Israel war with Iran. Official data showed gross domestic product (GDP) rose by 5% year-on-year, surpassing economists’ expectations of 4.8%.
The stronger performance marks a rebound from 4.5% growth in the previous quarter and comes as Beijing adjusts to a more cautious outlook. Last month, authorities lowered the country’s annual growth target to between 4.5% and 5%, the lowest goal set since 1991.
The latest growth was largely driven by manufacturing output, with exports of cars and other goods emerging as a key bright spot. Analysts noted that external demand for Chinese manufactured products remained relatively resilient despite global disruptions.
However, the broader outlook remains uncertain as the Middle East conflict, which began on 28 February, continues to disrupt global energy supplies. Asian economies have been particularly affected, with rising oil prices increasing production and transportation costs.
Economists warn that the full economic impact of the conflict has yet to materialize. Trade disruptions and higher inflation are expected to weigh on growth in the coming months, potentially leading to a weaker second quarter.
China’s export growth already showed signs of slowing, rising just 2.5% in March compared to a year earlier — a six-month low. Meanwhile, imports surged by nearly 28%, driven largely by higher global commodity prices, narrowing the country’s trade surplus to just over $50bn.
Beijing is attempting to stabilize its economy through increased investment in innovation and domestic consumption. Still, persistent challenges — including a struggling property sector, weak consumer demand and demographic decline — continue to cloud the long-term outlook.
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