China's Economic Growth Surprises Amid Global Tensions

Thu Apr 16 2026 15:08:05 GMT+0000 (Coordinated Universal Time)

In a remarkable turn, China's economy has grown by 5% in the first quarter of the year, outpacing expectations amidst the ongoing US-Israel-Iran conflict that has disrupted global energy supplies.

Despite global economic challenges and conflict in the Middle East, China's GDP grew by 5% in the first quarter, surpassing the anticipated 4.8%. This recovery is driven by strong manufacturing and export performance, particularly in the automotive sector. However, economists caution that the full impact of the ongoing conflict on trade and consumer spending may lead to weaker growth in the upcoming quarters.

China's economy grew faster than expected in the first three months of the year, even as countries around the world feel the impact of the US-Israel war with Iran.

Gross domestic product (GDP) rose by 5% in the period, compared to a year earlier, according to official data. Economists had expected the figure to come in at around 4.8%.

That came despite the conflict in the Middle East, which started on 28 February, severely disrupting global energy supplies, with Asian countries hit particularly hard.

It also marks the first release of official GDP figures since Beijing cut its annual economic growth target last month to a range of 4.5%-5%, its lowest expansion goal since 1991.

The rebound from a weaker expansion of 4.5% in the previous quarter was driven by manufacturing, while the world's second largest economy continues to be weighed down by falling property investment.

Cars and other exports were a major bright spot in the data, said Kyle Chan, an analyst from the Brookings Institution.

The Iran war's full effects are yet to be seen, Chan said, adding that next quarter's GDP figure is likely to be weaker due to trade disruptions caused by the conflict.

China's latest GDP target and economic objectives were announced in March under its latest Five Year Plan. Beijing also pledged to invest heavily in innovation, high-tech industries, and efforts to boost domestic spending.

The ruling Communist Party is trying to reshape the country's economy, which has been struggling with a number of issues including weak consumption, a shrinking population, and a prolonged property crisis.

From abroad, China also faces an energy crunch due to the Iran war and global trade tensions, including US President Donald Trump's tariffs policies.

China currently faces a 10% US tariff for most of its goods. However, US Treasury Secretary Scott Bessent said on Tuesday that the levies may be restored by the beginning of July to the levels in place before the Supreme Court struck down many of the import taxes.

Trump and Chinese President Xi Jinping are expected to meet in China in May.