Chinese GDP data published today show growth strengthened sharply at the start of the year, with the economy expanding by 2.2 percent on the quarter after an increase of 0.6 percent in the three months to December, above the consensus forecast for an increase of 2.1 percent. In year-over-year terms, growth picked up from 2.9 percent in the three months to December to a twelve-month high of 4.5 percent in the three months to March, above the consensus forecast of 3.9 percent.

This improvement in economic conditions follows the relaxation of many public health restrictions by authorities in late 2022. PMI survey data also showed conditions improved during the quarter, while offical monthly data also released today showed stronger growth in both industrial production and retail sales in March.

China's leadership has set a relatively modest annual GDP growth target of 5.0 percent for 2023 after the economy expanded by just 3.0 percent in 2022. Growth will likely pick up further in year-over-year terms this quarter, given the sharp fall in GDP in the same quarter last year caused by major lockdowns in Shanghai and Beijing.

First-quarter GDP is expected to rise 2.1 percent versus the fourth quarter which would compare with no sequential growth from the third quarter. The year-over-year expectation in the first quarter is growth of 3.9 percent which would compare with 2.9 percent growth last time.

Gross Domestic Product (GDP) refers to the final products at market prices produced by all resident units in a country (or a region) during a certain period of time. GDP is the core indicator of the national accounts, and also an important indicator to measure the economic conditions and the level of development of a country or region. GDP is calculated from three approaches -- production, income and expenditure -- which reflect gross domestic product and its composition from different angles.

GDP is the all-inclusive measure of economic activity. The GDP report contains a treasure-trove of information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. GDP components such as consumer spending, business and residential investment, and price (inflation) indexes illuminate the economy's undercurrents, which can translate to investment opportunities and guidance in managing a portfolio.

The data are compiled by NBS and the People's Bank of China (PBoC). Estimates for non-financial corporations, financial corporations, general government, household and the rest of the world sectors are published. The production accounts, distribution and use of income account, and capital account data are compiled by NBS. NBS also develops the financial account by rearranging financial transactions data in the flow of funds accounts compiled by PBoC. There are no breakdowns of government consumption expenditure, gross fixed capital formation, change in inventories and net exports. Household consumption expenditures are broken down into urban and rural. The income components of GDP are only published in the input-output tables. NBS uses the Chinese Industrial Classification of the National Economy.