Beijing: China’s economy accelerated in the first quarter of 2026, posting 5 per cent year-on-year growth despite the fallout from the US-Israel-Iran war, as strong exports and energy security helped cushion the impact.
China’s National Bureau of Statistics (NBS) said GDP rose 5.0 per cent in January-March, up from 4.5 per cent in the previous quarter and beating analysts’ expectations. The NBS hailed a “solid start” but warned that “external conditions have become more complex and volatile” due to the Middle East conflict.
Analysts say China has been relatively insulated from the oil shock. “It’s very clear that the Chinese economy has been fairly well-insulated from the Middle East conflict,” said Khoon Goh, head of Asia research at ANZ, Singapore. He noted that China incurred less disruption because it can access oil from Russia and partly Iran, and had curtailed exports of refined products.
The war has pushed Brent crude to around $108 a barrel, raising global costs. But Beijing’s shift to renewables and electric vehicles is reducing oil dependence by at least 10 per cent. Higher fuel prices are now expected to boost China’s EV makers as global buyers seek alternatives.
Industrial profits jumped 15.2 per cent in the first two months of 2026, led by computer, communication and electronic equipment manufacturing. Computer and electronics profits surged 200 per cent, NBS data showed. “Policy support is feeding through into both production and earnings, rather than producing only a short-lived sentiment bounce,” said Hao Zhou, analyst at Guotai Haitong Securities.
Still, officials cautioned that weak domestic demand and slower retail sales remain a drag. The IMF lowered China’s 2026 growth forecast to 4.4 per cent, as the war clouds global demand for Chinese exports.
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