China's National Bureau of Statistics (NBS) deputy head announced that the Chinese economy began 2026 on a promising note, despite facing a challenging external environment, including ongoing Middle East conflicts and global oil price volatility [1]. According to the latest data released by the NBS, China's Gross Domestic Product (GDP) grew by 5% year-on-year (YoY) in the first quarter of 2026, surpassing the consensus estimate of 4.8% and the previous quarter's growth of 4.5% [1].
The NBS official emphasized that the impact of Middle East conflicts on China's economy is relatively small, and that volatility in global oil prices has had a limited effect on the country [1]. It was noted that the recovery in China's producer prices is expected to positively influence corporate profits, with improvements driven by both domestic supply and demand dynamics as well as higher global oil prices [1].
While acknowledging that the Middle East conflict will have some impact on China's exports, the deputy head stated that China is still able to maintain relatively fast economic growth under these circumstances [1]. Domestic demand played a significant role, contributing 84.7% to Q1 GDP growth [1]. However, the NBS cautioned that the economy continues to face difficulties and challenges, with global uncertainties expected to increase going forward [1].
CONCLUSION
China's economy outperformed expectations in Q1 2026, with robust domestic demand offsetting external challenges such as Middle East conflicts and oil price volatility. While the outlook remains positive, the NBS warns of ongoing difficulties and rising global uncertainties.