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Record-breaking China, with a GDP that tells a different story from the trend of the trade balance: +5.3% GDP in the first quarter, beating all expectations. Even more so since the objective to be achieved for the year is approximately 5%. However, the Shanghai and Shenzhen stock markets widen their losses and it is clear why, in March the trade balance just suffered a loss of 7.5%. In any case, Chinese GDP exceeds the 4.8-5% expected by analysts: according to data released by the National Statistics Office, the increase on a cyclical basis is 1.6% against the 1.4% estimated at the vigil.
The reaction of the stock markets
The Chinese stock markets widen their losses even in the face of a particularly performing GDP: the Shanghai Composite index loses 0.88% to 3,030.58 points, while that of Shenzhen loses 2.65% collapsing to 1,657.63. Which contrasts with a real figure, that of import exports just released by the General Administration of Chinese Customs expressed in dollars. In the first three months of 2024, China’s international trade with the rest of the world showed increases in exports (1.5 percent), imports (1.5 percent) and aggregate trade (1.5 percent). ). However, in March alone, China’s exports fell 7.5% from a year earlier, while imports fell 1.9% and total trade fell 5.1%.
Exports in the first quarter were also weaker in dollar terms, but this could be attributed to volumes that continued to expand as manufacturers gained a greater share of the global market.
Wider markets
China’s gross domestic product increased 5.3% in the first quarter from a year earlier, but is it a real recovery?
The strong first-quarter growth rate topped a Reuters poll of analysts forecasting 4.6% and a full-year 5.2% expansion in 2023, but followed mixed economic data in recent weeks. Industrial production increased 6.1% in the first quarter from a year earlier, while industrial producer prices fell 2.7% as deflationary pressures continued to weigh on the manufacturing sector. Investment in fixed assets grew up 4.5% from a year earlier in the quarter, supported by a 9.9% increase in manufacturing investment, offset by a 9.5% decline in real estate investment. Retail sales increased 4.7% in the quarter, down from 5.5% in the January-February period.