China's economic growth has quickened in the first quarter of 2024, driven by significant government investment in manufacturing sectors, as reported by the National Bureau of Statistics on Tuesday. The economy expanded by 5.3% from the same period last year, marking a slight increase over the previous quarter's 5.2% growth. This development comes as Beijing pours funds into factory production to mitigate past economic slowdowns and stimulate growth.
The first quarter saw a notable 6.1% rise in industrial production year-over-year, coupled with a 9.9% increase in manufacturing investments. These figures reflect Beijing's focused efforts to bolster economic output through industrial expansion, particularly in high-tech sectors like electric vehicles and renewable energy. However, the strategy is not without its drawbacks, as signs of an uneven recovery emerge, highlighted by underwhelming consumer spending and ongoing struggles in the real estate sector.
The reliance on industrial output has led to excessive supply without corresponding domestic demand, causing a decline in capacity utilization to 73.6%. Moreover, inventory build-ups and tepid property investment, which decreased by 9.5% in the quarter, suggest that more balanced economic policies are needed to sustain long-term growth.
