China's economy is becoming more dependent on external demand despite strong performance, says Zichun Huang, economist at Capital Economics. China's 1Q GDP growth accelerated to 5.0% from 4.5% in the previous quarter. While there has been some tentative improvement in domestic demand growth, the main source of strength has been exports, Huang says, adding that the acceleration in 1Q GDP growth was driven by construction and industry. The Middle East conflict could further strengthen this trend,

China's economy is becoming more dependent on external demand despite strong performance, says Zichun Huang, economist at Capital Economics. China's 1Q GDP growth accelerated to 5.0% from 4.5% in the previous quarter. While there has been some tentative improvement in domestic demand growth, the main source of strength has been exports, Huang says, adding that the acceleration in 1Q GDP growth was driven by construction and industry. The Middle East conflict could further strengthen this trend, as higher fuel prices could drag on domestic demand, while boosting China's green tech exports, she adds.