China Economic Quarterly Q1 2024
China’s factory boom fuels optimism for economic recovery
This issue provides some key takeaways from China’s Q1 economic data and demystifies China’s FDI landscape.
Highlights
China’s economic momentum: A snapshot
- In Q1, China’s GDP grew by 5.3% YoY, setting the stage for the economy to achieve its official 5% target.
- Amid a surge in manufacturing, China’s industrial output grew by 6.1%, with high-tech manufacturing leading the way at 7.5%.
- Retail sales of services grew by 10.0%, outpacing the 4.0% growth rate for goods.
- Exports rose by 4.9%, propelled by a 6.8% increase in mechanical and electrical products.
- In March, the official manufacturing PMI rose to 50.8 due to heightened production and new orders; however, it remains to be seen whether the expansion will continue amid uncertain export prospects.
Demystifying China’s FDI landscape: Debunking five myths
- Debunking myth #1: Foreign companies are not leaving China—various factors are reshaping the FDI landscape.
- Debunking myth #2: China is solely a world’s factory? Foreign companies are increasingly tapping into China’s vast domestic service industry.
- Debunking myth #3: China’s FDI strategy has evolved beyond cheap labour to focus on high-tech sectors.
- Debunking myth #4: Is FDI still relevant for China’s economy? Foreign companies contribute significantly through valuable technological spillovers.
- Debunking myth #5: Discriminatory policies deter FDI? China’s FDI policies are more open than commonly perceived.
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