FirstFT: China’s economy beats forecasts to grow 4.5% in first quarter

China’s economy exceeded forecasts to expand 4.5 per cent year on year in the first quarter, as strong growth in exports and infrastructure investment as well as a rebound in retail consumption and property prices drove a recovery.

The January-March figure followed efforts by Beijing to restore business confidence damaged by pandemic controls last year and abrupt policy changes, but a nationwide Covid-19 outbreak at the start of this year held back the growth rate from the government’s full-year target of 5 per cent.

Analysts polled by Bloomberg had forecast gross domestic product to rise by 4 per cent. Economists expect growth to pick up as the year progresses. “Definitely, the recovery’s on track,” said Tao Wang, UBS’s chief China economist. “The momentum at the beginning of the year was stronger than expected.”

Xi Jinping, who formally embarked on an unprecedented third term as China’s president last month, is keen to revive economic growth. Gross domestic product expanded just 3 per cent last year, missing the official target of 5.5 per cent which was already the lowest in decades.

Here are two more reads on the world’s second-largest economy and how companies are dealing with rising tensions between Beijing and the west.

Here is what else I will be keeping tabs on today:

• Dominion vs Fox: The defamation trial against Fox News starts after it was delayed yesterday following a report of last-minute settlement talks.

• Results: Easyjet, Netflix, Bank of America, Goldman Sachs, Lockheed Martin, Johnson & Johnson and Ericsson report.

• WSJ reporter: Evan Gershkovich’s lawyers are set to appeal against his detention in Russia on charges of espionage.

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Five more top stories

1. US groups Charles Schwab, State Street and M&T suffered almost $60bn in combined bank deposit outflows in the first quarter. The deposit flight has been turbocharged by last month’s banking sector turmoil and signs of new competition to traditional banks. Read the full story.

2. EY has told staff it will cut 3,000 jobs in the US to eliminate “overcapacity”, with the axe mainly falling on its consulting arm. The redundancies, announced less than a week after the collapse of plans to split the Big Four firm, account for about 5 per cent of EY’s US workforce.

3. One of the US’s biggest public pension plans is set to write down its $52bn property portfolio in the latest sign that higher interest rates and the recent banking turmoil are causing pain in the sector. The chief investment officer of the California State Teachers’ Retirement System speaks to the FT.

4. Spain and Portugal are embracing public housing after years of under-investment as the two countries seek a solution to soaring property prices that have far outpaced wage growth. Here’s how the countries plan to fund tens of thousands of new homes.

5. The EU will sabotage its green transition if it bans so-called forever chemicals, the chief of Chemours, one of the world’s leading chemical companies, has warned. The industry argues that fluoropolymers, a class of synthetic long-lasting chemicals, are vital to many green technologies.

The Big Read

“Farmers are asking, ‘Why does Brussels hate us?’,” said one Belgian member of the European parliament. The EU is pushing for a greener agricultural sector to help meet its climate goals. But the industry’s well-funded lobby with close links to politicians is hitting back on policies that may affect the survival of many farmers, posing a risk to the bloc’s net zero goals.

We’re also reading . . . 

• Migrant workers: Labour shortages and demographic pressures are fuelling a competition between countries to attract skilled people, writes Sarah O’Connor.

• Sudan conflict: A power struggle in the country could blow up into a civil war. Who are the clashing military rivals now threatening security across east Africa?

• Bunged-up Britain: Gummed-up, process-heavy regulation is preventing UK businesses across sectors from moving fast, writes Helen Thomas.

Chart of the day

Investors are betting on further weakness in the US dollar after its recent declines, as the fallout from last month’s banking crisis limits how far the Federal Reserve can raise interest rates and US investors hunt overseas for returns.

Take a break from the news

We recently asked FT readers to share their favourite urban running routes. Responses came in from all over the world, extolling the joys of pounding the pavement in cities from Athens to Zurich. Find your next running route.

Additional contributions by Gordon Smith and Emily Goldberg