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China’s central bank showing no sign of panic

A one-handed economist would scarcely know what to say about China’s latest gravity-defying gross domestic product (GDP) performance, one that’s confounding the naysayers.

It was former US president Harry Truman who famously complained that “all my economists say ‘on the one hand,’ then ‘but on the other.’”

Many investors struggling to discern the outlook for Asia’s biggest economy are in a Truman state of mind. The bulls point to the better-than-expected 4.8% growth rate between January and March year-on-year, marking an acceleration from the 4% pace of the previous quarter.

The bears point to notable downshifts in retail sales and industrial output as evidence global headwinds are taking a rising toll. In March, retail sales dropped 3.5% from a year ago. Factory output increased 5%, slower than in January and February. Imports also fell slightly in March, another data point that suggests Beijing’s “zero Covid” lockdowns are hitting GDP.