FirstFT: Chinese economy grows 4.8% in first quarter


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China’s economy grew faster than expected in the first quarter, but official data showed a contraction in consumer activity as lockdown measures to counter the spread of Covid-19 weighed on the country’s outlook.

China’s gross domestic product rose 4.8% from the same period a year earlier, after rising 4% in the last three months of 2021. On a quarterly basis, GDP rose by 1.3%.

Retail sales, an indicator of consumer spending, fell 3.5% in March – its first contraction since July 2020 – as authorities tightened restrictions to counter the country’s worst coronavirus outbreak in more than two years.

The data will add pressure on the government of Chinese President Xi Jinping, which has reaffirmed its commitment to a zero-Covid policy despite rising costs and disruptions in the country’s biggest cities. Infections across China rose in April and Shanghai, its main financial hub, remained largely isolated.

Fu Linghui, spokesman for the National Bureau of Statistics, said “the functioning of the economy was generally stable” but pointed to “frequent outbreaks” of Covid-19 and an “increasingly serious and complex international environment “.

  • The containment effect: The lockdown in Shanghai began in late March, meaning its full impact won’t be recorded in the first-quarter report, which factored in less severe lockdowns at manufacturing hubs in Shenzhen and Jilin.

  • The wealthy seek to leave: Chinese immigration consultants say requests from wealthy people trying to leave increased after Shanghai’s lockdown, underscoring frustration with Beijing’s zero Covid strategy.

Thank you for reading FirstFT Europe/Africa. Here’s the rest of the news from the day — George

The latest news from the war in Ukraine

  • Military briefing: Ukrainian troops hold out in Mariupol, taking refuge underground in the city’s massive Soviet-era businesses, including the Azovstal steelworks and the seaport, which has an extensive network of tunnels.

  • Religion: The Russian Orthodox Church, a mainstay of Vladimir Putin’s rule, gave the invasion an air of legitimacy, reinforcing his portrayal of the war as some kind of reunion of former Slavic-Orthodox lands.

  • Cyprus: Long known as ‘Moscow on the Mediterranean’, the country has some of the closest political ties to Russia of any EU member state, but is trying to preserve the bloc’s unity vis-à-vis from Moscow.

1. The global economy under threat The twin jeopardy of slowing growth and high inflation, or stagflation, will hit the global economy this year as Russia’s war on Ukraine exacerbates a slowing recovery from the coronavirus pandemic, according to research by the Financial Times.

2. The streaming video boom is ebbing in the UK UK households have canceled video subscriptions in record numbers this year as they rein in non-essential spending to cope with the cost-of-living squeeze, heightening concerns about the end of a streaming boom fueled by a pandemic.

3. BMW pledges not to lose any jobs to electric vehicles The German automaker will not cut a single employee when switching from combustion engines to electric models, its chief executive Oliver Zipse has promised, even as economists predicted tens of thousands of job losses in the industry .

BMW CEO Oliver Zipse sits inside a concept car

Oliver Zipse, Managing Director of BMW: “At the end of the day, perhaps already in this decade at our Munich plant, there will be all-electric production without anyone losing their job” © Tobias Schwarz/AFP/ Getty Images

4. Macron pushes green credentials French President Emmanuel Macron, who visited a wind turbine component factory in Le Havre as he stepped up his re-election campaign last week, is trying to woo environmentally-conscious voters ahead of the April 24 run-off.

5. Executive compensation is experiencing a post-Covid rebound Pay for FTSE 100 chief executives has rebounded to pre-pandemic levels after rising by a third in 2021 as some sectors saw a post-Covid boom. Growth was mainly driven by a strong increase in annual premiums.

Summary of coronavirus

  • Fertility returns: The number of births in advanced economies has largely rebounded to pre-pandemic levels, FT analysis shows, a recovery partly due to stimulus policies.

  • England: The number of vacant NHS hospital beds in England is lower than at any time since the start of the pandemic as the health service deals with a surge in infections while trying to clear a backlog of treatment.

  • The FT view: China’s zero Covid policy has taught the world that it is no longer possible, if ever it was, to fight the virus through repression alone. We must find ways to live with the virus, writes our editorial board.

The day ahead

American housing The NAHB/Wells Fargo Housing Market Index for March is released today. The index is a weighted average of current single family sales, single family sales for the next six months, and traffic from potential buyers.

Bank of America The American bank publishes today its results for the first quarter.

Boston Marathon The oldest annual marathon in the world takes place in Boston for the 126th time.

Join us for the FT’s Crypto and Digital Assets Summit on April 26-27. register today be part of a critical conversation with the global finance and business elite, as they chart the way forward to bridge traditional finance with the crypto leaders of tomorrow.

What else we read

Trump’s momentum pivots on Pennsylvania The Republican Senate primary in Pennsylvania next month becomes a pivotal event in this year’s midterm elections and could determine which party controls the upper house of Congress. US President Joe Biden has beaten Donald Trump in 2020 in the state, but only by a very slim margin.

Safe assets and political risk Economists’ definitions of safe assets – those that serve as the bolthole in crises – are often devoid of political content, says John Plender. But safe assets, like reserve currencies and financial centers, have largely lost their preeminent status because of the war.

Deconstruct bad audits As audit failures have spread across UK businesses in recent years, construction and contracting companies have emerged as particularly prone to trouble, despite the attention garnered by the high-profile collapse of Carillion.

Get out of it all More and more workers are hanging out in the nooks and crannies outside of offices, more and more chefs and waiters are heading around the corner to escape the gaze of employers and customers, writes Viv Groskop. Most are simply looking for a moment of personally elected silence.

Best Business Books for April Our Work & Careers team has selected their favorite business books published this month, which include advice from entrepreneurs and a study on how flexible working can improve our lives and our cities.

Vine dinner

On May 1, New Zealand will open its borders to international tourism – exciting news for those who find happiness amid its countless beaches, coastlines and vineyards. Maria Shollenbarger presents Waiheke Island among five food and wine destinations in the world.

One of the many boat-filled harbors on New Zealand's Waiheke Island

One of many boat-filled harbors on New Zealand’s Waiheke Island © Getty Images/robertharding

To work — Find out what’s changing the world of work with Isabel Berwick, editor of Work & Careers. register here

troubled times — Your essential FT newsletter on the changes in business and the economy between Covid and conflict. register here

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