China has released its economic report card for the first quarter of the 15th Five-Year Plan period. Data released by the National Bureau of Statistics on April 16 shows that the preliminary calculation of the gross domestic product, based on constant prices, increased by 5% year-on-year, accelerating by 0.5 percentage points compared to the previous quarter. The performance of the domestic economy in the first quarter demonstrated both quantitative growth and qualitative improvement, with multiple economic indicators showing clear recovery. The humming of machinery in factories, strong export orders, and a booming service sector paint a picture of a vigorous start and improving economic structure for China's economy this spring.
How busy were the factories? From January to March, the value-added of industrial enterprises above the designated size grew by 6.1% year-on-year. In March, among 41 major industrial sectors, 30 saw year-on-year growth in value-added output. Furthermore, out of 626 major industrial products, 329 recorded year-on-year production growth. How strong were exports? In the first quarter, China's total goods import and export value reached 11.84 trillion yuan, a year-on-year increase of 15%, marking the highest quarterly growth rate in nearly five years. Exports amounted to 6.85 trillion yuan, growing by 11.9%, while imports reached 4.99 trillion yuan, increasing by 19.6%. How hot was the service sector? The value-added of the service industry grew by 5.2% year-on-year in the first quarter. Specifically, the leasing and business services sector, along with the information transmission, software, and information technology services sector, saw value-added growth of 12.2% and 10.6%, respectively.
Increasing production and income are core objectives of economic development. Earlier released corporate profit data corroborates the achievements since the start of the year. From January to February, the total profits of industrial enterprises above the designated size nationwide increased by 15.2% year-on-year (on a comparable basis). Mao Shengyong, Deputy Commissioner of the National Bureau of Statistics, stated that the economic performance in the first quarter was commendable. The economy achieved a strong start to the quarter, with GDP growing 5% year-on-year, a significant rebound of 0.5 percentage points from the fourth quarter of last year. Simultaneously, employment remained generally stable, prices showed positive changes, and goods imports and exports grew rapidly.
What is the quality of this report card? New growth drivers are taking on a major role in economic development. The economic development report card for the first quarter is full of substance. It can be said that the 5.0% GDP growth rate for the quarter was achieved against a backdrop of a more complex external environment and a relatively high base from the previous year. This year's economic growth is increasingly supported by the cultivation of new quality productive forces, innovation-driven development, and the accelerated growth of new drivers. In the first quarter, the value-added of the equipment manufacturing industry increased by 8.9% year-on-year, significantly faster than the average for all industrial enterprises above the designated size. It accounted for 35.1% of the total value-added of industrial enterprises above the designated size, with its share continuously increasing, contributing nearly 50% to the overall industrial economic growth. Another high-growth area is high-tech manufacturing, which saw a year-on-year increase of 12.5% in the first quarter. Although high-tech manufacturing accounts for less than 20% of the total value-added of industrial enterprises above the designated size, its contribution to overall industrial economic growth was 32.6%.
Corporate orders and production output are directly translated into profits. From January to February, the equipment manufacturing industry contributed 43.7% to the profit growth of all industrial enterprises above the designated size, while high-tech manufacturing contributed 51.8% to the profit growth of all industrial enterprises. These figures indicate to the market that, through years of continuous effort, the technological content of China's high-tech manufacturing has gradually increased. Some sub-sectors are transitioning from following and keeping pace to running alongside and even leading the pack. China's manufacturing industry is moving towards the high-end, with new growth drivers increasingly shouldering the major responsibility for domestic economic development.
In the new era, the service industry has become the "ballast stone" and "stabilizer" of the national economy. In the first quarter, the value-added of the service industry grew by 5.2% year-on-year. Specifically, the leasing and business services sector; information transmission, software, and information technology services; financial industry; transportation, storage, and postal services; and accommodation and catering sectors saw value-added growth of 12.2%, 10.6%, 6.5%, 4.3%, and 4.3%, respectively. Among these, the modern service sectors of information transmission, software, IT services, and leasing and business services together contributed nearly 25% to economic growth. Dongfang Jincheng's macroeconomic team pointed out that first-quarter GDP growth accelerated. The rapid development of sectors representing new quality productive forces, such as high-tech manufacturing, has further enhanced their role in driving the national economy, presenting a domestic macroeconomic situation characterized by stability and progress.
What about consumption? Data indicates a recovery, with signs of vibrant economic activity returning. Consumption constitutes final demand and is the fundamental force for economic growth. Entering 2026, multiple data points clearly outline the curve of consumption recovery. In the first quarter, total retail sales of consumer goods approached 13 trillion yuan, a year-on-year increase of 2.4%, accelerating by 0.7 percentage points from the previous quarter. The growth in consumption data stems from sustained policy efforts. Since the beginning of the year, various regions and departments have deeply implemented actions to boost consumption, effectively carried out policies for replacing old consumer goods with new ones, accelerated the cultivation of new growth points in service consumption, and promoted the positive operation of the consumer market. With the implementation of plans to accelerate the cultivation of new growth points in service consumption, service consumption maintained relatively rapid growth. In the first quarter, service retail sales grew by 5.5% year-on-year, 3.3 percentage points higher than the growth of goods retail sales. Holiday consumption continued to heat up, with a significant increase in resident travel, continuously unleashing consumption potential in areas like culture, tourism, and sports events. In the first quarter, retail sales in cultural, sports, and recreational services, as well as travel consulting and rental services, both achieved double-digit growth. Furthermore, new business formats, models, and scenarios are constantly emerging, with online consumption and digital consumption developing favorably. In the first quarter, online retail sales of goods and services increased by 8% year-on-year, significantly faster than the growth rate of total retail sales of consumer goods. Among these, online retail sales of goods grew by 7.5%, accounting for 24.8% of the total retail sales of consumer goods. New retail models such as unattended stores and warehouse membership stores maintained double-digit growth in retail sales. Digital applications like "artificial intelligence" drove relatively rapid growth in digital and information service consumption. In the first quarter, retail sales in the communication and information services category grew by over 10%.
Goods consumption is an important area for promoting consumption and benefiting people's livelihoods. In the first quarter, retail sales of goods increased by 2.2% year-on-year, accelerating by 0.7 percentage points from the previous quarter. Sales of basic necessities and some upgraded goods showed good growth momentum. In the first quarter, sales of grain, oil, and food products above the designated size grew rapidly, while sales of upgraded goods like communication equipment and cultural and office supplies also showed favorable growth. Additionally, the positive effect of the quality-improving and efficiency-enhancing policy for replacing old consumer goods continued to manifest. In the first quarter, sales revenue from the replacement of old consumer goods exceeded 430 billion yuan, benefiting over 60 million person-times. Green consumption also showed a positive trend this year. In March, the penetration rate of new energy vehicles in domestic retail reached 51.5%, with sales of energy-efficient and green products growing rapidly.
The research team led by Lian Ping at the Guangkai Chief Industry Research Institute noted that as policies aimed at stabilizing growth continue to take effect and the employment situation gradually improves, consumer confidence is expected to slowly recover. Driven by sectors like culture, tourism, catering, and sports entertainment, service consumption will continue to maintain relatively rapid growth above 5%, becoming the main engine of consumption. Upgraded goods such as communication equipment, smart home appliances, and green, intelligent appliances will maintain a high growth trend, supported by technological iteration and optimized replacement policies. New business formats like online retail, live-streaming e-commerce, and instant retail will continue to divert sales from offline channels, with their share steadily increasing.
What are the expectations for the rest of the year? The second quarter is expected to maintain relatively good growth. This year marks the beginning of the 15th Five-Year Plan period, and the first quarter serves as a bellwether for the entire year. Mao Shengyong believes that conditions still exist for the domestic economy to maintain relatively good growth in the second quarter. The rapid growth of new drivers, fueled by technological progress and industrial upgrading, is sustainable. These new drivers possess strong resilience in meeting both domestic and international demand. As one of the internationally recognized leading indicators for monitoring economic performance, China's Manufacturing Purchasing Managers' Index (PMI) for March was 50.4%, up 1.4 percentage points from the previous month, returning to expansion territory. Additionally, China's Non-Manufacturing Business Activity Index, which reflects the overall changes in the non-manufacturing economy, has recently returned to the expansion zone. The Non-Manufacturing Business Activity Index for March was 50.1%, up 1.4 percentage points from the previous month.
However, it is also important to note that the current external environment is more complex and volatile, the domestic contradiction between strong supply and weak demand remains prominent, and the foundation for economic improvement still needs consolidation. It is anticipated that the domestic economy will subsequently enter a new stage that emphasizes both quality and efficiency. The team led by Wen Bin, Chief Economist and Dean of the Research Institute at China Minsheng Bank, pointed out that recent macroeconomic policies have been closely aligned with the deployment for the start of the 15th Five-Year Plan period, closely tracking changes in the external situation, focusing on stabilizing growth, expanding domestic demand, and optimizing structure, while strengthening policy coordination and implementation effectiveness to provide strong support for consolidating the upward trend of the economy.