China's economy grew more than expected in the first quarter as it withstood headwinds from Beijing's fight against financial risk and pollution, and trade tensions with the United States.

While acknowledging the potential negative impact of a US trade war officials on Tuesday warned the country faced greater downside risk at home, citing the need for reforms.

The world's number two economy expanded 6.8 percent in January-March, better than the 6.7 percent tipped in an AFP survey of economists and the same as the previous three months.

It is also much better than the annual rate of around 6.5 percent targeted by the government.

Growth remained resilient even as Beijing kicked its war on smog into a high gear during the winter months by cutting production for many steel smelters, mills and factories.

"The national economy maintained the momentum of steady and sound development," said Xing Zhihong, a spokesman for the National Statistics Bureau. "The economic performance continued to improve and the economy was off to a good start."

Fears of a China-US trade war have been simmering in recent weeks, with Washington and Beijing exchanging threats of tit-for-tat levies on hundred of billions of dollars worth of goods.

US President Donald Trump has issued the warnings as part of his "America First" protectionist agenda that has focused on what he calls unfair practices by China that are killing American jobs.

Last week his Chinese counterpart Xi Jinping sounded a conciliatory note, promising to reduce tariffs on cars and open up the economy further.

For the past decade, about 20 percent of China's exports have been ferried to the US, according to Moody's Investors Services, which forecasts a material macroeconomic impact if Trump makes good on his threats with the consequences vibrating beyond China's end exporters and deep into the economy.

- Daunting tasks -

While a tariffs spat with Trump has yet to make a significant impact, Commerzbank economist Hao Zhou warned "the overall growth is still under pressure".

"The trade tensions are likely to persist over the foreseeable future, clouding the trade and growth outlook."

Xing at the statistics bureau acknowledged the cloud of "international economic uncertainties" but said "China-US trade frictions do not pose a problem for China's economy".

Instead, he pointed to domestic risks to growth.

"The problems of unbalanced and inadequate development in China are acute and the tasks for reform and development are daunting," he said.

After years of breakneck growth driven by exports and debt-fuelled investment, authorities are increasingly worried about a possible credit crisis and are stepping up their battle against financial risk.

And the forecast-beating growth will give policymakers room to push through measures to battle those hazards and also address pollution.

Last week, the central bank released data showing total financing grew at 10.5 percent in March, the slowest pace on record, according to China-focused economist Andrew Polk.

"We think a further (economic) slowdown is on the cards before the end of the year," said Julian Evans-Pritchard of Capital Economics, pointing to the drags "from tighter fiscal policy and slower credit creation" that will weigh on activity.

But China is counting on its 1.4 billion consumers to pick up the slack.

Retail sales grew 9.8 percent in the first quarter on-year, beating forecasts of 9.7 percent in a Bloomberg News survey.

Output at China's factories and workshops expanded 6.8 percent for the first quarter, matching the expansion seen during the same period last year, but below the 6.9 percent forecast by Bloomberg News. Industrial production grew six percent in March.

Related Links
Global Trade News

Tweet

Thanks for being here; We need your help. The SpaceDaily news network continues to grow but revenues have never been harder to maintain. With the rise of Ad Blockers, and Facebook - our traditional revenue sources via quality network advertising continues to decline. And unlike so many other news sites, we don't have a paywall - with those annoying usernames and passwords. Our news coverage takes time and effort to publish 365 days a year. If you find our news sites informative and useful then please consider becoming a regular supporter or for now make a one off contribution.
SpaceDaily Contributor $5 Billed Once credit card or paypal		SpaceDaily Monthly Supporter $5 Billed Monthly paypal only

Trump considers re-joining Pacific trade pact he once spurned
Washington, United States (AFP) April 13, 2018
President Donald Trump said Thursday the US could re-enter the Trans-Pacific Partnership if it could get a "better" deal, potentially marking an abrupt about-face for a president who campaigned against the deal and swiftly withdrew from it after taking office last year. "Would only join TPP if the deal were substantially better than the deal offered to Pres. Obama," he wrote in a late night tweet. "We already have BILATERAL deals with six of the eleven nations in TPP, and are working to make a d ... read more