China’s economy grew more slowly in the first quarter of this year than it did in the fourth quarter of last — 7.7% year on year against 7.9%. The consensus among economists had been that the recovery from last year’s slowdown would continue into the first quarter, albeit modestly, but not ease back.
It was industrial production that was the weak spot. Fixed asset and real estate investment both ran at 20% above the same quarter the previous year. Absent the weakness in industrial output, that might have tempted policy makers to tighten monetary policy to cool off the property market. This Bystander would now expect the central bank to hold fire on that while it sees if the recovery picks up again in the second quarter.