The Chinese economy grew by 4.5 percent year-on-year in the first quarter of 2023, indicating that the world’s second-largest economy is now firmly on the path to recovery after the end of Beijing’s strict ‘zero-COVID’ policies.

The growth rate exceeds market estimates even though it is slightly below Beijing’s aim of 5% growth for 2023, which was announced at the National People’s Congress meeting in March.

Additional official economic data that was provided on Tuesday confirmed indications of an upswing in the economy.

Retail sales grew by 10.6 percent year-on-year, according to data from the National Bureau of Statistics, while value-added service output rose by 5.4 percent.

Value-added industrial production rose by 3 percent year-on-year, although the Purchasing Manager’s Index, a measure of China’s manufacturing trends, dropped slightly to 51.9 from 52.6 in February. Any reading above 50 is considered an expansion.