Industry News

BEIJING, April 16 (Xinhua) -- China's economy grew 5 percent in the first quarter of 2026, outpacing expectations of some foreign institutions and reinforcing the country's role as a stabilizing force in an increasingly volatile global economy.

The world's second-largest economy generated 33.4 trillion yuan (about 4.87 trillion U.S. dollars) in output during the period, accelerating by 0.5 percentage points from the fourth quarter of 2025, data from the National Bureau of Statistics (NBS) showed Thursday. The result marks a strong opening to China's 15th Five-Year Plan period (2026-2030).

In the first quarter, "the growth of production and supply accelerated, market demand continued to improve, employment was generally stable, market prices picked up moderately, and high-quality development advanced with new and positive momentum," the NBS said in a statement. "The national economy got off to a good start with the development showing greater resilience and vitality."

China's GDP grew 5 percent year on year last year. The country has targeted 2026 growth at 4.5 to 5 percent and will strive for better in practice.

BALANCED IMPROVEMENT

"China's economic performance in the first quarter was remarkable, fully demonstrating the strong resilience of the national economy," said Mao Shengyong, deputy head of the NBS, during a press conference on Thursday.

According to Mao, the data reflects a marked improvement across both supply and demand. On the supply side, agricultural production remained favorable, while industrial output grew at a faster pace compared with the fourth quarter last year, with sustained rapid growth in the service sector.

On the demand side, the growth rate of retail sales of consumer goods quickened by 0.7 percentage points compared to the last three months of 2025. Fixed-asset investment swung back to growth, rising 1.7 percent, and foreign trade in goods registered the fastest quarterly growth rate in five years.

Mao emphasized that achieving such a solid start is particularly significant given the high base of the first quarter last year and the increasingly complex and challenging external environment this year.

Over the 14th Five-Year Plan period (2021-2025), China saw its economy grow at an average annual rate of 5.4 percent, well above the global average, and accounted for around 30 percent of global growth.

"However, we should be aware that the external environment is becoming more complex and volatile, the imbalance between strong supply and weak demand is still acute, and the foundation for economic growth is yet to be consolidated," Mao said.

Addressing concerns over the external environment, he acknowledged that as a major economy deeply integrated into the global system, China may face certain headwinds. Meanwhile, he emphasized that the impact would be "limited and controllable" as China still enjoys distinctive strengths -- a complete industrial chain, an optimized energy structure, and more robust supporting conditions.

He added that the factors underpinning economic development in the first quarter, especially the core growth drivers, will continue to power relatively rapid expansion.

RESILIENCE FROM WITHIN

While ongoing geopolitical conflicts have sent international energy prices soaring, triggering fuel shortages and disrupting production and life in many nations, China has remained largely unaffected by these shocks, Mao said.

He attributed this stability to China's sustained efforts to develop the new energy sector in a forward-looking manner and diversify its energy mix. Oil accounts for less than 20 percent of China's total energy consumption, limiting the economy's exposure to global price swings.

Economists and industry experts view the Q1 performance as a strong reaffirmation of China as a safe haven amid heightened geopolitical tensions, and of its status as a premier engine of global growth, which has become even more pronounced.

"China is now being redefined as an asset class with a 'safety premium,'" said Song Xuetao, chief economist at Sinolink Securities, underlining the greater resilience of China's energy structure and industrial chains than that of other major manufacturer economies.

"China not only possesses the capacity to withstand shocks but also the agility to convert challenges into opportunities," Song observed. Advances in coal-to-chemicals technology allow domestic substitution of certain petrochemical products, while the mass adoption of new energy vehicles reduces household dependence on fossil fuel.

He said economies maintaining production continuity and boasting energy substitution deserve a higher valuation premium, with Chinese assets standing as the "most representative beneficiaries of this logic."

Ji Mo, chief China economist at DBS Bank, described China's 5 percent GDP growth in the first quarter as a "stellar result" that highlighted the resilience of the Chinese economy.

In an interview with Xinhua, Ji pointed out that this performance goes far beyond a mere seasonal rebound. It serves as strong evidence of China's successful structural transformation during the 14th Five-Year Plan period, reflects the outcomes of earlier reforms, and signals a shift toward high-quality, innovation-driven development.

Against the backdrop of global geopolitical turbulence, she argued that stability has become a tangible "dividend" for China. She identified China's core strengths of robust energy supplies, rich talent pool and advanced manufacturing, which together lead to progresses in technological innovation.

"China now has multiple pillars of growth. Upgrades in consumption, technology and manufacturing have enabled the country to withstand global risks," Ji said.