China Posts 5.0% First-Quarter Growth as Housing Slump Deepens

China’s economy posted 5.0% year-on-year growth in the first quarter, but the figure masked a widening split between state-backed investment and a housing market that kept dragging on households. The National Bureau of Statistics of China said GDP reached 33,419.3 billion yuan, or about $4.6 trillion, and rose 1.3% from the previous quarter.

The headline number beat the 4.8% forecast in a Reuters poll and came in above the 4.5% pace logged in the final quarter of 2025. Yet the support was uneven. Urban fixed-asset investment rose 1.7% in the first quarter, while investment in the property sector fell 11.2%, showing how much of the momentum still came from rail lines, infrastructure and other government-backed projects rather than from a broader private-sector rebound.

The weakness in housing continued to weigh on sentiment. New home prices extended their decline in March, even as some major cities showed modest month-on-month improvement. That ongoing slump has left consumers feeling less prosperous and less willing to spend, keeping a lid on domestic demand at a time when Beijing is leaning harder on public works to stabilize growth.

The March data reinforced that caution. Retail sales rose just 1.7% from a year earlier, while industrial output increased 5.7%. The urban survey-based unemployment rate rose to 5.4% from 5.3% in February, underscoring how fragile the recovery remained even as factories kept producing. The statistics bureau said the economy faced an “acute” imbalance between strong supply and weak demand.

Analysts said the strong first quarter was probably lifted by activity earlier in the period, especially exports and policy support, but momentum appeared to soften by March. The Asian Development Bank now expects China’s growth to slow to 4.6% in 2026 and 4.5% in 2027, a reminder that state-led investment can steady the economy in the short run, but may not be enough on its own if household confidence and the property market keep weakening.