China is Indeed "Robust": Q1 Economy Grows 5% - Exceeding Expectations

China’s economy grew rapidly in the first quarter (Q1) of 2026. Strong export growth offset sluggish domestic demand, although energy shocks triggered by the Iran war loom over growth prospects and threaten global demand.

Citing data from the National Bureau of Statistics on Thursday (16 April 2026), China’s gross domestic product (GDP) grew 5% in the three months to March. This figure rose from 4.5% in the previous quarter and exceeded economists’ expectations for 4.8% growth in a Reuters poll.

Previously, Beijing had lowered this year’s growth target to the range of 4.5% to 5%. This is the most pessimistic target recorded since the early 1990s.

Analysts had seen this as an implicit acknowledgement of slowing domestic demand. Not to mention the impact of ongoing trade tensions with the US.

“We must recognise that the external environment is becoming increasingly complex and volatile,” the statistics bureau said in a statement, warning of an “acute” imbalance between “strong supply and weak demand”.

Separately, urban fixed asset investment, including real estate and infrastructure investments, rose 1.7% in Q1 compared to the previous year. However, this missed expectations for 1.9% growth in a Reuters poll, with investments in the property sector falling 11.2%.

In March, China’s retail sales grew 1.7% year-on-year, slowing from the 2.8% increase driven by holidays in February. This figure was also below economists’ expectations for 2.3% growth.

However, industrial production rose 5.7% last month year-on-year. This was even stronger than analysts’ expectations for a 5.5% increase, compared to 6.3% growth in February.

Meanwhile, the surveyed urban unemployment rate in March was 5.4%. This rose from 5.3% in February.

It should be noted that, as the world’s largest oil importer and an economy heavily reliant on exports, China is vulnerable to oil price shocks that have slowed trade. This has driven up factory costs and worsened prospects for the rest of the year.

However, in this Q1, China’s exports grew 14.7% year-on-year in US dollars. According to the Economist Intelligence Unit, this is the fastest pace since early 2022.