China Q1 GDP rises 5% while deflation and weak consumer demand linger

China's National Bureau of Statistics reported that real GDP grew 5.0% year‑on‑year in the January‑March quarter, marking the first quarterly increase in five quarters and keeping the country on track for its 4.5‑5.0% annual growth target. The expansion was driven by stronger external demand and a modest rebound in domestic activity, but the GDP deflator has remained negative for 12 consecutive quarters, indicating persistent deflationary pressure.

Import volumes surged 24% year‑on‑year between January and April, outpacing export growth and reflecting heightened demand for semiconductors, gold and other high‑tech components. Analysts caution that the import surge does not signal a fundamental shift toward higher household consumption, which remains subdued and constrained by low credit demand. The government is expected to continue policy support such as appliance subsidies, equipment upgrades and infrastructure investment to shore up growth.

Overall, the data show a mixed picture: solid headline growth amid lingering structural challenges in the housing market, local‑government debt and consumer confidence.