China’s headline GDP growth surged to 18.3% y/y in comparison to last year’s COVID-related contraction, but sequential quarter-on-quarter momentum and industrial output slowed beyond market expectations. March credit growth disappointed and tipped the credit impulse into negative territory, suggesting weaker cyclical activity ahead in the second half of the year. Both retail sales and PPI growth were surprisingly strong in March, and the resilience of the export manufacturing sector remains a key area to watch in the coming months.
