More detailed data on China’s first quarter economic performance show that the 6.8% growth rate, which beat estimates and outstrips the government’s annual target of 6.5%, was driven by accelerating construction and manufacturing sectors.
Together, the two sectors grew 6.3% year-on-year (y/y), from a 5.7% rate in Q4 2018, making up 39% of the first quarter’s GDP, according to calculations made by Reuters from National Bureau of Statistics data.
Other major sectors, however, felt a slowdown from the end of 2017. Services grew 7.5% y/y in the start of this year, down from 8.3% in Q4, and agriculture’s growth pace dropped from 4.4% to 3.2% across quarters.
The general outlook amongst analysts is that China can expect a slowdown in the second half of this year, despite an expectations-beating first quarter. Headwinds include sharp deleveraging forced by Beijing, and further trade tensions with the Western countries.