The Latest Numbers From China Show the Government Is Facing a Huge Challenge

China’s GDP growth came in on target in the first quarter. Slumping output in March, a slide into deflation and an expanding credit bubble underline the magnitude of the challenge the economy continues to face. We believe the weeks ahead will see the government intensifying efforts to support growth.

GDP growth came in at 7 percent year on year, down from 7.3 percent in the final quarter of 2014, but in line with Premier Li Keqiang’s target of 7 percent for the year. On a quarter-on-quarter annualized basis, the economy slowed to 5.3 percent growth, down from 6.1 percent.