China's Economy Grows 5 Percent as Iran War Pressures Energy, Exports as a Support

JAKARTA - China's economy grew 5.0 percent in the first quarter of 2026 amid supply chain disruptions and a surge in energy prices due to the war between the United States and Israel against Iran. Kyodo News quoted Thursday, April 16 reported, the rate was higher than the 4.5 percent growth in the previous quarter, with exports as the main support.

Official data released Thursday showed China's real gross domestic product or real GDP in the January-March period was also in line with the 2026 growth target pegged at 4.5 to 5 percent. On a quarterly basis, the world's second largest economy grew 1.3 percent, up slightly from 1.2 percent in the October-December 2025 period.

The Iran war that broke out on February 28 has shaken global supply chains and pushed energy prices up. However, the impact on China so far has been limited.

China's National Bureau of Statistics said the country's economy started the year well. According to the agency, a number of key macroeconomic indicators show a recovery, while new sources of growth are growing rapidly.

Even so, warnings still appear. The bureau said the external environment was increasingly complex and volatile. The imbalance between strong supply and weak demand was also considered still sharp, while the basis for economic growth was not really solid.

Still referring to the Kyodo News report, China's exports in the first quarter rose 11.9 percent, while imports jumped 19.6 percent. Industrial production also grew 6.1 percent.

On the other hand, the recovery at home has not been even. Retail sales of consumer goods only rose 2.4 percent year-on-year. Fixed asset investment, excluding rural households, increased by 1.7 percent. The property sector is still a weak point, after property development investment fell 11.2 percent amid an unfinished crisis.

The International Monetary Fund (IMF) on Tuesday estimated that China's economic growth would slow to 4.4 percent this year, down from 5.0 percent in 2025. The slowdown is expected to be influenced by the war in the Middle East and still weak domestic consumption.