China’s Gross Domestic Product (GDP) increased by 4.5% in the first quarter of this year, according to government data released on Tuesday. This growth was driven by a rise in consumption and retail sales, following the relaxation of the country’s strict “zero-COVID” policy. The increase in GDP from January to March, compared to the same period in 2022, was the quickest in the past year and surpassed the 2.9% growth seen in the previous quarter. Experts attribute this growth to a resurgence in consumption, as individuals returned to shopping malls and restaurants following the relaxation of stringent COVID-19 measures.
In March, the total retail sales of consumer goods climbed by 10.6% compared to the previous year, exhibiting a growth of 7.1 percentage points from the first two months of the year. Moreover, in March, industrial production output, which gauges the manufacturing, mining, and utilities sectors, surged by 3.9% as compared to the corresponding period of the previous year. Fixed-asset investment, which involves China’s investment in infrastructure and other initiatives to stimulate growth, grew by 5.1% during the initial three months of 2023, as compared to the same period in the previous year.
The growth in China’s GDP is significant, as it is the world’s second-largest economy. The increase in GDP is a positive sign for the country’s economic recovery, as it rebounds from the impact of the COVID-19 pandemic. The Chinese government’s decision to relax its “zero-COVID” policy has played a crucial role in this growth.
Meanwhile, Hong Kong’s ambition to become a crypto hub has presented opportunities for state-affiliated banks in China to partner with regulated crypto firms in the city. Despite a ban on crypto activities in mainland China, these banks have expressed interest in collaborating with crypto firms in Hong Kong. The Hong Kong arm of the Bank of Communications is currently in talks to provide account services to registered crypto businesses in the city, according to the Wall Street Journal. These developments suggest that Chinese banks are exploring the crypto space through activities outside of mainland China.
The Chinese government has been cracking down on cryptocurrency activities in recent years. In 2017, the government banned initial coin offerings (ICOs) and shut down domestic cryptocurrency exchanges. However, the government’s stance on cryptocurrencies appears to be evolving. In 2019, President Xi Jinping called for the country to accelerate the development of blockchain technology, which underpins cryptocurrencies. The recent interest from Chinese banks in crypto partnerships suggests that the country’s stance on cryptocurrencies may be softening.
In conclusion, China’s 4.5% Q1 GDP growth is a positive sign for the country’s economic recovery. The growth was driven by a resurgence in consumption and retail sales, following the relaxation of the country’s strict “zero-COVID” policy. Additionally, the interest from Chinese banks in crypto partnerships in Hong Kong suggests that the country’s stance on cryptocurrencies may be evolving.