• Industrial Production Jumped Sharply
• Improving Retail Sales
• Investment Picking Up
• Stimulus Steps Offset Trade War Impact

China released a slew of official economic data that beat expectations, including the widely anticipated gross domestic product figure.

China's economic growth held steady in 1Q19 despite a tariff war with the US, in a reassuring sign that Beijing's efforts to reverse a slowdown might be gaining traction. The Chinese economy expanded by 6.4% yoy in 1Q19, topping the 6.3% consensus had expected and remaining at the top end of Beijing’s target growth range of 6.0% to 6.5% for this year. China’s economy grew by 6.4% yoy in 4Q18 and 6.8% in 1Q18.

The steady 1Q19 growth defied expectations for a slowdown as industrial production jumped sharply and consumer demand showed signs of improvement. The upbeat readings, which also showed faster growth in retail sales and investment, are likely to add to optimism that China may be starting to stabilize, relieving some investor anxiety over the sputtering global economy.

The growth of the primary industry slowed to 2.7% yoy in 1Q19 from 3.5% in 4Q18. On the other hand, growth in the secondary industry was slightly higher at 6.1% yoy from 5.7% in 4Q18 even as the tertiary industry grew at a slower pace of 7.0% yoy compared to 7.4% in 4Q18.

On a quarter-on-quarter basis, the GDP expanded 1.4% in 1Q19, compared to a 1.5% growth in the previous period.

Source: Hong Leong Investment Bank Research - 18 Apr 2019