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China says its economic growth is improving, but analysts warn it still needs stimulus

China’s claim of stronger-than-expected economic growth in the first part of this year may be tempting policymakers to pare back stimulus. Analysts say that would be a mistake.

The world’s second-largest economy expanded 6.4 per cent in the first quarter from the same period in 2018, the government announced last week, slightly beating analyst predictions. An array of policies, including encouraging banks to make more loans, put in place last year as the economy took a hit from the US-China trade war have been credited with helping boost activity.

But pronouncements since last week’s GDP figure, including after a meeting of the Communist Party’s powerful politburo, indicate that officials see the growth outlook improving, feeding speculation of a rethink in how much of a boost the economy may need.

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