Beijing: China's rapid growth hit the 5% ceiling, but surrounding crises are making the "K-Shape" economic growth even clearer. Mr. Pakorn Katchalee, a lecturer in the Marketing Department, Faculty of Business Administration, Chiang Mai University, and a China expert, revealed on the Good Morning ASEAN program on MCOT News FM 100.5 that the Chinese economy expanded by 5.0% in the first quarter of this year. This expansion reaches the upper end of the full-year target of 4.5-5% and is higher than many forecasts. This reflects a "speed boost" at the beginning of the year to accumulate figures according to the usual pattern, although the overall picture in the remaining three quarters still needs to be monitored to see if it can maintain this level. The main driving force comes from consumption stimulus policies such as the old-for-new program, resulting in a 2.4% recovery in retail sales from a low base last year, but the sustainability of this recovery cannot yet be confirmed.
According to Thai News Agency, China's economic structure is transitioning to an innovation model, leading to exponential growth of 40-50% in some industries, such as lithium-ion batteries, 3D printing, and industrial robotics. This has driven the value-added industrial sector to grow by over 6%, while fixed asset investment has increased by nearly 10%. However, the overall growth is still a "K-shaped" recovery, with new sectors surging while traditional sectors like textiles remain sluggish.
A major weakness remains in the real estate sector, where investment contracted by 11.2%, saleable area decreased by 10%, and sales value fell by over 16%. Despite government stimulus measures including tax breaks, interest rate reductions, and loan incentives, consumer confidence has not recovered. Meanwhile, the service sector has become a new driving force, with service production growing by 5.0% and service retail growing by 5.2%, almost double the growth of general retail. This reflects consumer behavior that is willing to pay for 'experiences' in areas such as travel, technology, and lifestyle.
The tourism sector was particularly outstanding, growing by 9.9%, more than double the global average. China aims to become the world's largest tourism economy by 2030. Last year, it welcomed 154 million foreign tourists, a 17% increase, and spending surged by 40%, driven by visa-free policies and the development of new tourist attractions combined with technology.
Amidst the Iranian crisis, China is also experiencing a "K-shaped" impact. Beneficiaries include electric and hybrid vehicles, which are experiencing strong growth due to energy concerns. Meanwhile, China is using fertilizers and soybeans as bargaining chips in trade negotiations. The rising global fertilizer costs stemming from the Middle East situation have led the US to hope for soybean exports, while China opts to import from Brazil instead. This reflects a more diverse bargaining strategy, not limited to rare earth minerals.
However, the long-term challenge remains stimulating domestic consumption amidst an aging society with over 30% elderly population, which puts pressure on both the workforce and purchasing power. China is therefore accelerating workforce skills development, coupled with injecting innovation and AI to drive growth in the upper sectors of its 'K-Shape' economy, while weaker sectors will take time to recover.