China set to post slowing growth in first quarter

BEIJING

China's economy is expected to have slowed in the first three months of the year as it continues to be buffeted by a debilitating property sector crisis and flagging consumer activity.

Beijing officials last month set a target of around 5 percent growth for the year, a goal they admitted would "not be easy" and which analysts said was ambitious given the headwinds the country is confronting.

But there are some bright spots: Digures last month showed industrial production soared even as consumption remained sluggish, reflecting the uneven recovery China has charted since emerging from growth-strangling zero-COVID policies in early 2023.

And analysts said they expected China to post around 4.6 percent growth in the year's first quarter today, down from 5.2 percent in the final three months of last year.

Analysts polled by Bloomberg expect it to come in at 4.8 percent.

Woes in the property market remain a millstone for the economy, analysts said, as home prices continued to fall and top developers including Country Garden and Vanke sent out distress signals over their profits and challenges paying off debt.

"Persistent property sector weakness and subdued household consumption, resulting from negative wealth effects from the property correction and somewhat sluggish income growth" will hamper growth, Brian Coulton, Fitch Ratings' Chief Economist told AFP.

Ratings agency Fitch this month downgraded China's sovereign credit outlook to negative, warning of "increasing risks to China's public finance outlook" as the country contends with more "uncertain economic prospects."

And analysts say state pledges of support for the property sector are yet to sway the market or consumers.