**"The Recovery Is On Track": China Economy Rebounds Strongly With 4.5% GDP Jump In Q1**

"The Recovery Is On Track": China Economy Rebounds Strongly With 4.5% GDP Jump In Q1

Last week, when discussing the latest record - (https://www.zerohedge.com/markets/liftoff-imminent-china-injects-record-credit-kickstart-economy)for the month of March - Chinese credit injection which saw a massive 5.4 trillion yuan in Total Social Financing, beating estimates by almost CNY 1 trillion...

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... and sparking a surge in China's all-important Credit Impulse...

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... we said (https://www.zerohedge.com/markets/liftoff-imminent-china-injects-record-credit-kickstart-economy)that China's delayed "liftoff was imminent", and that "the 2008 deja vu meter just went off the charts, because while the US is about to sink into a recession with commercial real estate set to fall all off a cliff, it is once again China that is - willingly or otherwise - **set to serve as the world's growth dynamo at a time when the entire developed world is about to max out at the same time.** This is precisely what happened in 2008 when China unleashed the biggest credit expansion in modern history, sparking not only historic growth spree but also an exponential debt increase that sent China's debt to over 300% of GDP."

Since then, we have seen China report stellar trade data with both exports and imports sharply higher than expected, more solid real estate prints as housing prices have clearly rebounded from two years of decline, and most importantly, **overnight China's Q1 GDP  also surprised to the upside, rising at a 4.5% annual clip in the first quarter - the strongest quarter for the Chinese economy since Q1 2022 - as strong growth in exports and infrastructure investment as well as a rebound in retail consumption and property prices drove a recovery in the world’s second-largest economy.**

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The official figure, which exceeded analyst expectations of a 4% rise and was the third consecutive beat of the median forecast...

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... followed efforts by Chinese leader Xi Jinping’s government to restore business confidence damaged by pandemic controls last year and abrupt policy changes.

That said, the Q1 growth rate was just short of the government’s recently upgraded full-year target of 5%, held back by a nationwide Covid-19 outbreak at the start of this year, but economists expect it to pick up pace as the year progresses.

Xi, who formally embarked on an unprecedented third term as China’s president last month, is keen to revive economic growth following China's shocking reversal of its covid-zero policy. Last year, GDP expanded just 3%, missing the official target of 5.5% which was already the lowest in decades.

“Definitely, the recovery’s on track,” said Tao Wang, UBS chief China economist. “The momentum at the beginning of the year was stronger than expected.”

Echoing what we said last week (https://www.zerohedge.com/markets/liftoff-imminent-china-injects-record-credit-kickstart-economy), the FT writes (https://www.ft.com/content/db9d8080-472c-419b-858f-07799849c5db)that "China’s rebound is crucial to global economic growth this year as developed nations grapple with persistently high inflation, rising interest rates and sluggish expansion in the wake of the pandemic and Russia’s full-scale invasion of Ukraine."

“The national economy showed a steady recovery and made a good start,” China’s National Bureau of Statistics said. But the agency cautioned the situation was “complex and volatile, inadequate domestic demand remains prominent and the foundation for economic recovery is not solid yet”.

Curiously, while Chinese commodities markets rallied following Tuesday’s data release, equities failed to hold on to early gains. That's because the data may have snuffed out recent hopes that bad news is good news and would lead to more stimulus. As Bloomberg reports Sofia Horta e Costa writes, "It’s clear markets are setting a high bar for China’s economy. So China data beats estimates yet again, but hardly anything moves i…

https://www.zerohedge.com/markets/recovery-track-china-economy-rebounds-strongly-45-gdp-jump-q1