China's economy improves in Q1 as key indicators surpass expectations

China's economy shows positive momentum in the first quarter, with several key indicators beating expectations and laying a foundation for the 15th Five-Year Plan (2026-2030). Data from the National Bureau of Statistics show GDP grew 5% year on year in Q1. Domestic consumption, investment, exports and imports, and industrial production all sustained growth amid a backdrop of external uncertainty. The statistics agency said the economy in the first quarter began on a favorable path, developing with high quality and with resilience and growth drivers continuing to consolidate. Other macro indicators also point to a clear recovery trend: urban unemployment remained at 5.3%; the consumer price index (CPI) in March rose 1%, while the producer price index (PPI) ended a 41-month decline. Total fixed-asset investment rose 1.7%, turning from a contraction to a rise. The total retail sales of consumer goods and services accelerated, with services retail up 5.5%. Foreign trade: Exports and imports reached 11.84 trillion yuan (about $1.726 trillion), up 15% and the highest quarterly growth in nearly five years. Notably, exports of high-tech and green products rose strongly, with electric vehicles up 77.5%, lithium batteries up 50.4% and wind-power equipment up 45.2%, reflecting a shift in export structure. Manufacturing and business activity continued to improve. The PMI manufacturing and non-manufacturing indexes both returned to expansion in March; the small and medium-sized enterprise development index reached 89.6 points; profits of industrial enterprises rose 15.2% in the first two months of the year. Indicators of innovation also showed clear progress. Authorities' monitoring shows entrepreneurship activity rose 8.8%, tech firms up 8.1%; AI-related patent filings rose 31.2% year over year. Domestic demand was boosted through stimulus programs. By mid-April, consumer goods innovation programs had generated sales of more than 5 trillion yuan (about $728.9 billion). Tourism recovered strongly, with the extended Spring Festival holidays recording 596 million trips, total spending surpassing 800 billion yuan (about $116.6 billion), both record highs. International observers say China is transitioning to a growth model based on innovation, quality and efficiency, while continuing to play a stabilizing role in the global economy. However, the economy still faces challenges such as uneven domestic demand, pressure on firms and risks from the external environment. The government has stressed that it will continue to implement flexible policies, push ahead with reforms and strengthen the growth foundation. With the current foundation, China aims for growth of 4.5-5% this year and to achieve even higher outcomes to start a solid new development phase, according to VietnamPlus.