The Chinese economy expanded 4.5% during the first quarter, according to what I’ll generously call “estimates” released by the Party on Tuesday.

Consensus was looking for 4%. Last month, at the National People’s Congress, Beijing set a cautious target of around 5% for the full year+.

Recall that Q4’s print was likewise an upside surprise. If you’re skeptical of the data, you aren’t alone.

Headed into 2023, many macro observers assumed the world’s two largest economies were poised to go their separate ways. In the US, growth was expected to slow quickly as the impact of last year’s policy tightening worked its magic, while growth in China was seen accelerating once the country’s re-opening virus wave ran its course.

Suffice to say things didn’t go quite as planned. US consumers came out guns blazin’ in January and the labor market refused to surrender. By late February, markets were worried the Fed might have to raise rates all the way to 6% in an effort to calm things down.

China, meanwhile, remained something of a conundrum. The January-February activity data rollup was middling, and a month ago today, the PBoC delivered an RRR cut. The bank left the MLF rate unchanged this week, and although authorities have pledged to support the recovery, such promises are always tempered by cautious remarks about avoiding “flood” stimulus, Beijing’s derisive (if accurate) description of Western monetary accommodation.

Tuesday’s GDP figures were accompanied by March activity data, which showed retail sales rose 10.6%, nearly matching the highest guess and the briskest YoY pace since June of 2021. Consensus was looking for 7.5%.

The number is meaningless. China is lapping the 2022 Shanghai lockdown. That’s an easy comp for retail sales. A crippled aardvark could clear this bar.

Industrial output, meanwhile, underwhelmed, printing 3.9%. Consensus was 4.4%. Cumulative fixed asset investment in Q1 rose 5.1%, which looked like a big disappointment. The January-February reading was 5.5%, so there must’ve been a deceleration in March. You can draw your own conclusions about what that may or may not mean for credit supply and demand.

Inflation remains very tame in China, which isn’t necessarily a good a thing depending on how you want to look at it. CPI rose just 0.7% last month, slower than expected and indicative of a lackluster domestic spending impulse. Producer price deflation deepened.

Exports, on the other hand, were very strong in March, but there are pressing questions about the durability of global demand.

Note that the disparity between March’s near 15% jump in shipments abroad and economists’ expectations for a 7% decline was the widest in half a decade.

Imports were weak, though, raising fresh concerns about domestic consumption just a month after imports notched a surprise increase.

Ostensibly, the combination of uneven growth and low inflation argues for both monetary and fiscal stimulus. Who knows what Tuesday’s mixed data means for those stimulus calls.

As noted here Sunday, we’re in a macro environment where the old adage about your guess being “as good as anyone’s” can be taken quite literally.