China’s economy grew faster than expected in the latest quarter, according to official data released Thursday, defying global recession fears but facing mounting risks from escalating geopolitical tensions. The world’s second-largest economy expanded by 5.3% year-on-year, surpassing analyst projections of 4.8% growth.
The stronger-than-anticipated performance was driven by robust industrial output and consumer spending during the Lunar New Year period, sources familiar with the matter told Reuters. However, officials cautioned that the recovery remains uneven, with persistent weakness in the property sector and soft export demand.
‘The numbers look good on paper, but we’re seeing significant regional disparities,’ said a Beijing-based economist who requested anonymity due to the sensitivity of the topic. ‘Manufacturing hubs are humming along, while smaller cities continue to struggle with debt and unemployment.’
Analysts at Goldman Sachs noted that while domestic demand has shown resilience, the outlook is clouded by multiple factors including trade restrictions and what they described as ‘increasingly volatile’ global security conditions. MarketWatch reported that defense-related stocks have gained nearly 15% year-to-date as investors price in higher geopolitical risk premiums.
The positive economic data comes amid heightened tensions between China and Western nations over Taiwan and technology transfers. Some experts suggest the strong figures may give Beijing more policy flexibility to navigate these challenges. ‘This takes some pressure off the PBOC to stimulate growth,’ a Hong Kong-based strategist told Bloomberg, referring to China’s central bank. ‘But everyone’s watching how the government balances economic priorities with national security concerns.’