Reporter Meng Ke
In the first quarter of 2024, China's GDP grew 5.3% year on year, 1.6% month on month compared with the fourth quarter of 2023, and the economic growth exceeded market expectations. Recently, foreign investors have announced that this positive momentum will continue, and raised their expectations for China's GDP growth in 2024.
China's economic foundation is more stable
According to the National Bureau of Statistics, in the first quarter, the added value of the primary industry was 1153.8 billion yuan, up 3.3% year on year, and its contribution to economic growth was 2.7%; The added value of the secondary industry was 10984.6 billion yuan, up 6.0% year on year, and its contribution to economic growth was 41.6%; The added value of the tertiary industry was 17491.5 billion yuan, up 5.0% year on year, and its contribution to economic growth was 55.7%.
Xiong Yi, the chief economist of Deutsche Bank in China, recently released a research report that benefited from the strong growth of 6% year-on-year in industrial added value in the first quarter, while the moderate expansion of the service industry increased by 5% year-on-year, providing a good support for the economic opening situation in the first quarter.
Wang Tao, head of Asian economic research and chief China economist of UBS, told the Securities Daily that the year-on-year growth of GDP in the first quarter exceeded expectations mainly due to the recovery of exports and the stronger than expected growth of added value of the service industry. At the same time, industrial production, manufacturing investment and infrastructure investment grew steadily.
Zhao Yaoting, global market strategist of Kingsoft Asia Pacific region (excluding Japan), said frankly that China's GDP data in the first quarter easily exceeded expectations, laying a good beginning for achieving the economic growth target of about 5% this year.
From the three demand indicators, in the first quarter, fixed asset investment increased by 4.5% year on year; The total retail sales of consumer goods increased by 4.7% year on year; The import and export of goods increased by 5% year on year.
Wang Tao said that from the average annual compound growth rate since 2019, the growth of total retail sales of consumer goods has been generally stable, the growth of fixed asset investment has improved, and exports continue to recover.
"Overall, global growth seems to be accelerating again, and China's manufacturing industry and exports are expected to be driven by the improvement of the global macro demand environment. Chinese enterprises also continue to invest in infrastructure and equipment, or can benefit from the upward trend of the global economic cycle." Zhao Yaoting said.
Raise the annual economic growth forecast
"In the next few quarters, China's economy is expected to grow slightly more than 1% month on month. Considering the weakening of the base effect, the downward pressure on the price side and the demand side remains, and the growth of industrial output may slow down. At present, the willingness to consume has steadily improved, and it is expected that this positive momentum will continue." Xiong Yi said, considering various factors, Deutsche Bank raised China's GDP growth forecast for 2024 by 0.5 percentage point to 5.2%.
Wang Tao said that in view of the stronger export demand and the higher than expected economic growth in the first quarter, UBS raised its GDP growth forecast for 2024 from 4.6% to 4.9%. At the same time, the CPI and PPI inflation forecasts for 2024 were lowered.
Morgan Stanley raised its forecast for China's economic growth in 2024 to 4.8% from 4.2% previously, mainly due to the strong export and manufacturing investment. Xing Ziqiang, chief economist of Morgan Stanley in China, said that of the 0.6 percentage point increase in the annual GDP growth forecast, two thirds of the contribution came from strong exports, and the remaining one third was related to capacity investment in the manufacturing industry. Policies are encouraging enterprises to update equipment.
In Zhao Yaoting's view, China's economy is moving steadily towards the goal of GDP growth of about 5.0% within the year. Potential of China's GDP growth drive Although there are signs of recovery, more relevant policy support may still be needed.
Xing Ziqiang suggested that the follow-up macro policies need to focus more on residents and consumers, and release consumption potential with more powerful investment in social security.
Wang Tao believes that in view of the stronger than expected economic growth in the first quarter, the willingness of the government to further increase policies is low in the short term. Therefore, the People's Bank of China may not reduce the MLF operating interest rate again in 2024, while the LPR still has room for reduction.
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