China's Economy Surges Amid War, Export Engine Keeps Growth Rolling

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Chinas economy surged in Q1, growing 5% year-on-year, outpacing expectations despite the Iran war. Industrial output surged 5.7% driven by global demand for electronics and cars. However, retail sales and exports slowed, indicating weak domestic spending and global demand. Economists warn a prolonged conflict could hurt growth, with the IMF cutting its 2026 forecast to 4.4%. China aims for 4.5-5% growth this year via stimulus, but risks deepening deflation without boosting household demand. Supp