China set for near-5% growth amid imbalances and risks

Significance Quarter-on-quarter growth accelerated to 1.6%, from 1.2% previously. A 6% year-on-year expansion in the secondary sector -- manufacturing and construction -- led the growth, while the services sector also grew by a solid 5% year-on-year. Impacts Growing export orders underpinned strong growth in manufacturing, notably electronics, electric vehicles (EVs), renewables and shipbuilding. Western governments could impose trade sanctions on Chinese EVs and renewable technology exports over subsidy concerns. Consumer-facing services growth will keep moderating after the post-pandemic reopening boost but remain among the fastest-growing areas. The property sector downturn is worsening as government measures have not stabilised market confidence or developer liquidity issues.