China registers 5% Q1 GDP growth as deflation persists and consumer demand stalls

China's National Bureau of Statistics reported that real GDP rose 5.0% year‑on‑year in the January‑March quarter, the first quarterly increase in five quarters. The growth was driven by improved domestic demand and steady export orders, while the country continues to grapple with a 12‑quarter deflationary trend in the GDP deflator.

Despite the modest rebound, analysts note that consumption remains weak and investment is retreating. "Ce que nous observons, c'est un nouveau ralentissement de l'économie," said economist Frédéric Neumann. Retail sales have slowed, housing prices fell in 70 cities, and local‑government debt pressures persist. The government has pledged subsidies for appliances, infrastructure spending and other measures, but structural challenges in the real‑estate sector and external risks such as Middle‑East tensions could curb future growth.

The mixed picture underscores the difficulty Beijing faces in shifting from an investment‑led model toward stronger consumer‑driven growth.