China’s economy grows at 5% in first quarter, shrugging off initial impact of Iran war

China's economy grew by 5% in the first quarter of 2026, according to data released on Thursday. This growth exceeded expectations and accelerated from the previous quarter, despite the ongoing Iran war. The January-March data indicates a 1.3% quarter-on-quarter expansion, the fastest in a year. While economists believe China can withstand short-term impacts from the war, prolonged conflict and rising energy prices could negatively affect growth later in the year. The International Monetary Fund recently lowered its 2026 growth estimate for China to 4.4% due to the war's global economic shocks. Chinese leaders have set a growth target of 4.5% to 5% for the year.

China's economy experienced a faster-than-expected growth of 5% in the first quarter of the year, surpassing economists' predictions of 4.8%. This growth occurred despite the ongoing US-Israel war with Iran, which has disrupted global energy supplies, particularly affecting Asian nations. The economic rebound, driven by manufacturing and exports like cars, follows a weaker expansion of 4.5% in the previous quarter. While the conflict's full impact is still unfolding, analysts anticipate a potential weakening of GDP in the next quarter due to trade disruptions. The growth figures were released following Beijing's announcement of a reduced annual economic growth target of 4.5%-5% and pledges to invest in innovation and domestic spending.