China Q1 GDP Hits 5% Amid Export Surge and Energy Headwinds

China's gross domestic product grew by 5% in the first quarter, accelerating from 4.5% in the previous quarter and beating the 4.8% growth forecast. This performance brings Beijing closer to its annual growth target of 4.5% to 5%, the most conservative goal set since the early 1990s. The growth was primarily driven by a surge in exports, which climbed 14.7% in Q1. However, the National Statistics Bureau warned of an acute imbalance between strong supply and weak domestic demand, noting that the external environment is becoming increasingly volatile. Internal economic indicators remain fragile. Urban fixed-asset investment rose only 1.7%, missing the 1.9% forecast, while investment in the property sector plummeted by 11.2%. Retail sales also lagged, growing just 1.7% in March against expectations of 2.3%, signaling a continued slump in consumer spending. The outlook is further clouded by an energy shock stemming from the conflict in Iran. Export growth slowed sharply to 2.5% in March from 21.8% in the January-February period as logistics and energy costs rose. Furthermore, factory-gate prices rose in March for the first time in over three years, indicating that these costs are now eroding corporate margins. On the industrial front, output expanded 5.7% in March, slightly above the 5.5% forecast. Despite this, the labor market showed signs of stress, with the urban survey-based unemployment rate ticking up to 5.4% from 5.3% in February.