China's Q1 growth beats expectations

The Chinese economy beat many economists' forecasts between January and March, with gross domestic product (GDP) reaching 18.07 trillion yuan (2.47 trillion euros $2.63 trillion), the National Bureau of Statistics said on Monday.

The world's second-largest economy grew 6.9 percent in the first quarter of 2017, compared to 6.8 per cent in the fourth quarter of 2016 and 6.7 per cent for the whole of last year.

Chinese growth was last that strong in July to September of 2015.

China saw its slowest growth in nearly three decades in 2016, at 6.7 percent. But its economy still outpaced most of its rivals.

The official full-year economic growth target for 2017 is 6.5 percent.

Monday's data also showed China's industrial output growth rose to 7.6 percent year-on-year in March, beating a Bloomberg estimate of 6.3 percent.

Analysts said central government infrastructure spending, along with easy consumer credit - which has fuelled a property boom - helped drive stronger demand.

Investment in property development rose 9.1 percent in the first three months from a year earlier, compared with 6.9 per cent for the whole of 2016.

China's real estate market continues to flourish - and now accounts for about 15 percent of GDP - despite government restrictions on apartment purchases and home loans.

Several analysts expect house prices to begin cooling later this year as measures take effect, but they say an outright crash is unlikely.

Beijing has said it wants to move away from relying on debt-fuelled investment and towards a consumer-driven economic model, but the transition hasn't gone as planned.

Instead, more stimulus spending and infrastructure shows Beijing has reverted to "the same old" investment-driven growth model, Raymond Yeung and David Qu of ANZ Research wrote in a note.

Looking ahead, China's growth momentum is not expected to last through the whole year, Julian Evans-Pritchard of Capital Economics said in a note.

"Our own measure of economic activity also points to a strong start to 2017, though we don't expect the strength to be sustained," he said, adding that the recent credit growth acceleration is now being reversed.

mm/msh (AFP, AP, dpa, Reuters)