Measures from Beijing take effect: China's economy is growing at an unexpectedly rapid rate of 6.4 percent


China's economy is growing faster than expected. The second-largest economy grew in the first quarter by 6.4 percent compared to the same period last year, as the statistics office announced on Wednesday in Beijing.

Growth is thus surprisingly stable compared to the last quarter of last year. Experts had expected slower growth in the first three months of this year due to the negative impact of the US trade war and other uncertainties.

However, the tax cuts and other measures taken by the Chinese government to boost the economy are having an effect. For example, industrial production in the first quarter rose 6.5 percent year-on-year. Retail sales increased by 8.3 percent. Investment in fixed assets, ie spending on machinery, real estate or infrastructure, grew by 6.3 percent.

Strong growth in China also benefits the German economy, which exports a lot to China and is heavily involved in the Chinese market. "The economy is doing better," said independent Chinese expert Ye Tan. «The stock market and the real estate market are developing well. Added to this is the loose monetary policy. All these measures boost consumption. "The outlook is not bad:" There are no signs that economic development is deteriorating this year. "

Growth is also within the government's 6.0-6.5 percent target for this year, which is slower than it has been in nearly three decades. Earlier, however, there had been other encouraging economic data, with the IMF recently upping its forecast for China from 6.2% to 6.3% this year.

However, the Organization of Developed Countries (OECD) warned that, while economic stimulus measures may accelerate growth in China in the short term, they undermine long-term efforts to reduce high debt, even for many large OECD countries, and to correct structural distortions.

"Policymakers should focus on long-term strategies to move the economy towards higher domestic consumption and services, improve the efficiency of the economy, and ensure that future growth is more sustainable, greener, and socially equitable," says an OECD statement to her new annual report on China.

In the trade dispute with the US, stable growth could initially strengthen China's bargaining position. But a failure of the current talks and a subsequent new escalation of the special tariffs are likely to have severe negative effects, warned the OECD. The global economy would continue to suffer from this, as China accounts for a quarter of global growth.

The two largest economies have been overdrawn with special tariffs since last year. Meanwhile, about half of all US imports from China are burdened with additional duties. The US wants a reduction in the US trade deficit and calls for better market access, more effective protection against product piracy and forced technology transfer. Also, the US is bumping into government funding from Chinese companies, which distorts the market.

If there is no agreement in the ongoing trade talks, threaten new punitive measures. The $ 200 billion US tariff on imports from China could then be increased from the current 10 percent to 25 percent.


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