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China’s economy steadies as stimulus kicks in

China’s real economic growth rate held flat in the January-March quarter at 6.4 per cent on the year, breaking a streak of slowdowns since the first quarter of 2018, but higher borrowing by individuals and businesses raises questions about how long the relief will last.

The growth rate was “noticeably better than market projections of 6.2 to 6.3 per cent,” National Statistics Bureau spokesperson Mao Shengyong told reporters on the day the data was released.

Other economic indicators are improving as well. The Purchasing Managers’ Index, or PMI, rose to 50.5 in March, topping the boom-or-bust mark of 50 for the first time in four months. Industrial production increased by 8.5 per cent on the year, the fastest clip in 56 months.

Much of the boost comes from economic policies enacted by the government since last fall. About 84 million people have been exempted from paying income tax under changes that began in October. Infrastructure investment also grew 4.4 per cent in the January-March period.

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