China's economy has started the 16th Five-Year Plan period with strong momentum and stable performance. The first-quarter economic report, just released, shows that GDP grew by 5.0% year-on-year at constant prices. This growth rate hits the upper limit of the full-year target range of 4.5% to 5%, positioning China among the top performers globally among major economies. Despite complex and volatile external shocks, key indicators have surpassed expectations.
Understanding the "better-than-expected" performance can begin with several key metrics. Investment has shifted from decline to growth—in the first quarter, fixed-asset investment increased by 1.7% year-on-year, marking a turnaround. Investment is a crucial driver of economic growth. Following a rare negative growth in investment after the third quarter of last year, the Central Economic Work Conference at the end of last year proposed measures to stabilize and revive investment, effectively stimulating private investment. Since the beginning of this year, various regions and departments have optimized the implementation of "dual key" projects, continued to advance major engineering initiatives, and steadily promoted the transformation and upgrading of the manufacturing sector. In the first quarter, infrastructure investment and manufacturing investment grew by 8.9% and 4.1%, respectively. The synergistic effects of policies have materialized, allowing investment to play a more effective role as a key economic driver.
Service consumption growth has accelerated—in the first quarter, service retail sales grew by 5.5% year-on-year. Service consumption holds significant potential for growth and broad development prospects. This year, driven by a series of policies aimed at boosting consumption, new business formats such as mobility services and cultural tourism have shown strong growth momentum, with holiday-related economic activity gradually heating up. Moving forward, by implementing the spirit of the National Service Industry Conference and deepening actions to expand and enhance the service sector, service consumption is expected to continuously create new points of economic growth.
Corporate profitability has improved significantly—in the first two months of this year, the total profits of industrial enterprises above the designated size nationwide increased by 15.2% year-on-year. Profits in the equipment manufacturing and high-tech manufacturing sectors grew rapidly, reflecting a continued recovery in the profitability of industrial enterprises. As production intensifies, profits grow, and efficiency improves, a wide range of market entities will inject vibrant vitality into the economy.
Foreign trade has seen substantial growth—in the first quarter, the total value of goods trade imports and exports exceeded 11 trillion yuan, a record high for the same period, with a year-on-year increase of 15%. This represents the highest quarterly growth rate in nearly five years. Amid a world of turmoil and transformation, opportunities and challenges coexist. In a global market full of uncertainties, Chinese products with solid capabilities have demonstrated exceptional competitiveness. A combination of factors, including recovering external demand, a complete domestic industrial support system, and the release of corporate innovation momentum, supported an 11.9% growth in goods exports in the first quarter.
Market expectations have improved—in March, the Manufacturing Purchasing Managers' Index (PMI) stood at 50.4%, returning to expansion territory above the 50% boom-bust line after two months. Both the manufacturing PMI and the service sector activity level improved in March, returning to expansionary zones. This releases positive signals of a continuous improvement in economic sentiment, confirming that market confidence is strengthening.
The "better-than-expected" performance is not entirely surprising. Regardless of changes in the external environment, China has remained steadfast in managing its own affairs well, anchoring high-quality development as the primary task, unifying effective qualitative improvement with reasonable quantitative growth, accelerating the development of new quality productive forces, and strengthening the momentum towards innovation and excellence. By moving forward steadily, step by step, and accumulating small victories into major successes, a 5.0% growth rate is both reasonable and in line with economic development laws.
With a "better-than-expected" start, the future looks even more promising. Achieving a stable opening in the first quarter amidst a turbulent external environment underscores that the Chinese economy remains an "oasis of certainty" for global development. Currently, external instability and uncertainties remain numerous, and the foundation for stable and improving economic conditions still needs consolidation. Having grown and strengthened through trials and challenges, the Chinese economy will, as always, forge ahead against the wind and waves, creating more "better-than-expected" outcomes.