Chinese economic growth in 2022 tumbled to one of its worst levels for nearly half a century but there were signs of a better 2023 performance, according to data from China’s National Bureau of Statistics (NBS).
Gross domestic product (GDP) grew by 2.9% in October-December. Although slower than the third-quarter’s 3.9% pace, it was better than market expectations of a 1.8% gain, reports Reuters.
However for 2022 China’s GDP was only 3%, well short of the official target of 5.5%, and down on the 8.4% growth in 2021.
In December, exports and imports both fell, albeit by slightly less than analysts expected. Economists anticipate a drop in demand for Chinese goods from an economic slowdown in the EU and US.
Poor growth
Apart from the 2.2% seen in 2020 when Covid first hit, it is China’s worst economic growth since 1976 – the last year of chairman Mao’s ‘Cultural Revolution’, which hammered the Chinese economy.
A Reuters poll forecast growth to rebound to 4.9% in 2023, as benefits from the ditching of the ‘zero-COVID’ policy and government support for a severe property sector downturn.
According to the Guardian, the abrupt ending of zero-Covid policies last month is regarded as being a way of helping economic growth in China in 2023 and beyond.
The World Bank forecasts GDP growth will quicken to 4.3% this year and 5% in 2024.
Rebound in 2023?
David Bassanese, chief economist for Betashares, said that while the statistics should be treated with caution, the GDP figures were “much better than feared in the final months of 2022”.
Kang Yi, director of the NBS, said China’s 3% growth was “relatively fast” compared with competitors, but said the global trade situation was not optimistic.
“Businesses still face many difficulties in production and operation, scientific and technological innovation is not strong enough, and people still have considerable difficulties in employment,” Kang said, as reported by CNBC.
China’s leaders are set to announce the full-year GDP growth target in March.
US and China trade
With the US and China still at odds over trade, Bloomberg reports that trade between them is on track to break records, undermining rhetoric about the world’s top economies “decoupling”.
US government data through November suggest that imports and exports in 2022 will add up to an all-time high, or at least come very close, when the report comes out on 7 February.
Beijing’s own full-year figures show record trade of around $760bn.
Problems persist over Beijing’s stance on Taiwan and Washington’s aggressive drive to restrict Beijing’s access to key semiconductor technology.
