This episode contains segments on:
- China’s Q1 GDP growth;
- China’s March 2026 industrial production;
- China’s March 2026 retail sales;
- Opinions of the State Council on Promoting the Expansion and the Quality of the Service Industry
- Regulations on Countering Improper Extraterritorial Jurisdiction by Foreign States
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Read more:
China’s Q1 GDP Growth
https://www.stats.gov.cn/sj/zxfb/202604/t20260417_1963336.html
China’s March 2026 Industrial Production
https://www.stats.gov.cn/sj/zxfb/202604/t20260416_1963329.html
China’s March 2026 Retail Sales
https://www.stats.gov.cn/sj/zxfb/202604/t20260416_1963325.html
Opinions of the State Council on Promoting the Expansion and the Quality of the Service Industry
https://www.gov.cn/zhengce/content/202604/content_7066483.htm
European Chamber Statement on China’s Regulations on Countering Improper Extraterritorial Jurisdiction by Foreign States
https://www.europeanchamber.com.cn/en/press-releases/3784/
Exporting Control: China’s Strategic Toolkit
https://www.europeanchamber.com.cn/en/press-releases/3781/
Transcript:
RUI: Hello and welcome to China ShortCuts,
XINHE: the European Chamber’s weekly catch-up on China’s business landscape.
RUI: This episode was recorded on 22nd April 2026.
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RUI: China recorded a GDP growth rate of five per cent year-on-year in Q1 2026, up 0.5 percentage points relative to its Q4 2025 performance.
XINHE: The tertiary sector, which includes the service industry, expanded by 5.2 per cent year-on-year during the January-March period, while the primary and secondary sectors grew at 3.8 per cent and 4.9 per cent respectively.
China’s Q1 growth rate is so far in line with the country’s formal target of achieving “GDP growth of 4.5–5 per cent, while striving for better in practice”, as outlined in the Chinese Premier Li Qiang’s Report on Work of the Government released at this year’s Two Sessions.
Rui: It is also consistent with the 15th Five-Year Plan, which details the country’s intention to support the development of frontier technologies over the next five years. In this regard, investment in high-tech industries grew by 7.4 per cent during the first three months of the year, significantly outpacing overall investment growth, which increased by 1.7 per cent.
Xinhe: During Q1 2026, imports to China grew relatively faster than exports from the country to the rest of the world. The former increased by 19.6 per and the latter by 11.9 per cent compared to Q1 2025’s levels, a positive sign given that trade imbalances have been a persistent source of concern for many of China’s trading partners, including the EU.
Despite this development, China still ran a trade surplus of CNY 1,855 billion in Q1 2026 with the rest of the world.
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RUI: In March 2026, production at larger industrial firms in China—with an annual income of over CNY 20 million—grew by 5.7 per cent year-on-year, down slightly from 6.3 per cent in February 2026.
XINHE: Production growth in the manufacturing industry was particularly strong, coming in at six per cent year-on-year, with the mining and utilities industries recording 5.7 per cent and 3.5 per cent growth respectively.
30 out of 41 major industries surveyed recorded increases in production in March. The largest growth was registered in the railway, shipbuilding, aerospace and other transportation equipment manufacturing sector, at 13.3 per cent year-on-year.
New energy vehicle production recorded a 1.2 per cent year-on-year increase, after production had fallen by 13.7 in February 2026.
(Music)
RUI: Total retail sales of consumer goods in China grew by 1.7 per cent year-on-year in March, a slowdown relative to the 2.8 per cent growth rate seen a month prior.
XINHE: Excluding weak automobile sales—which were down 11.8 per cent—retail sales of consumer goods grew at a healthier 3.6 per cent. Online retail sales of goods and services continued to outpace sales growth in physical stores, with the former accounting for a quarter of all retail sales of consumer goods in China.
(Music)
RUI: On 21st April, China’s State Council issued the Opinions on Promoting the Expansion and Quality Improvement of the Service Industry, which calls for the country’s service industry to be further developed in order to support China’s “industrial upgrading, meeting people’s livelihood needs, and driving employment expansion.”
XINHE: The document calls for increased policy support for incubators for emerging industries and future industries; for China to improve its inspection, testing and certification capacities, benchmarking them against international standards; and for China to improve its ability to respond to foreign-related intellectual property risks.
In the artificial intelligence domain, the opinions outline plans for the implementation of China’s AI+ initiative, which aims to have at least 70 per cent AI-enabled terminals and agents in key industries by 2027.
Rui: The opinions also call for further opening up in the service industry, including via the expansion of pilot initiatives relating to value-added telecommunications services, biotechnology and wholly foreign-owned hospitals. However, despite these positive signals, businesses will be waiting to see tangible improvements before committing to large scale investments.
(Music)
Xinhe: On 15th April, the European Chamber released a statement on the Regulations on Countering Improper Extraterritorial Jurisdiction by Foreign States, which was published by the State Council on 13th April.
Rui: While the Regulations’ stated aim is to serve as a defensive instrument for China to protect its interests from extraterritorial provisions enacted by foreign states, they contain several provisions that may impact businesses. This includes a provision that places liability on “any organisation or individual [that] implements or assists in the implementation of improper extraterritorial measures by a foreign state, thereby infringing upon the lawful rights and interests of Chinese citizens or organisations.”
Xinhe: The decree shares a limited degree of similarity with the EU’s Blocking Statute, which also aims to counteract third-country extraterritorial measures. However, it is broader scope, and contains vague language, potentially giving Chinese officials wider discretion to punish companies and individuals, including through criminal liability.
Rui: The regulations also affirm China’s ability to use extraterritorial provisions itself when deemed necessary. This is concerning given that Chinese extraterritorial export controls—which were originally announced in October 2025 and subsequently suspended—are set to come into force in November this year.
Xinhe: To read more about China’s evolving export control rules and regulations, check out the Chamber’s latest publication, Exporting Control: China’s Strategic Toolkit, which was published earlier this month. A link can be found in the episode notes.
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RUI: Thanks for listening, and don’t forget to tune in next week.
XINHE: In the meantime, please find useful links in the episode notes.