Nation remains on the right track of maintaining growth

The National Bureau of Statistics reported last week that China's top-line GDP growth rate in the first quarter was 6.4 percent, at the upper end of the government's target of 6 to 6.5 percent growth for 2019. This faster-than-expected growth gives policymakers some breathing room to continue a stable monetary policy and to implement fiscal policies aimed both at transforming the economy and at reducing the risks of accumulated debt.

Chinese policymakers are dealing with the hard dilemma of simultaneously transforming the long-term nature of the economy while avoiding short-term inflation or recession. To transform the economy, the nation needs to continue to reduce outstanding debt levels and shift from overcapacity heavy and extractive industries to a more innovative, consumer-focused economy. The danger is that moving too fast in that direction could throw lots of people out of work or cause the financial collapse of companies.

This quarter's data show that China is avoiding this short-term dangers while still moving toward long-term goals.