China’s economy last year grew at one of its slowest rates in more than three decades, official figures showed yesterday, as it was battered by a crippling property crisis, sluggish consumption and global turmoil.
The figures were in line with expectations and even beat Beijing’s target, but would likely pile fresh pressure on Chinese officials to unveil more stimulus measures to improve business activity and get the country’s army of consumers spending again.
Chinese National Bureau of Statistics (NBS) revealed that GDP expanded 5.2 percent to 126 trillion yuan (US$17.6 trillion) last year.
Photo: EPA-EFE
The reading is better than the 3 percent recorded in 2022, when strict zero-COVID-19 curbs destroyed activity, but marks the weakest performance since 1990, excluding the pandemic years.
While 5.2 percent would be looked on enviously by other governments such as the US and those in the eurozone — which each expanded about 2 percent in 2022 — it is well down from the levels of about 6 or 7 percent constantly enjoyed in the 2010s.
China’s economy enjoyed an initial post-COVID-19 pandemic rebound early last year, but ran out of steam within months as a lack of confidence among households and businesses hit consumption. Statistics last month showed deflation continued for the third month in a row, likely deepening consumer reluctance to spend.
Tensions with the US and efforts by some Western nations to reduce dependence on China or diversify their supply chains have also hit growth.
NBS official Kang Yi (康義) yesterday told media that the recovery had been an “arduous task” last year, while other data painted a bleak picture of the state of the Chinese economy as the year drew to a close.
Between the third and fourth quarters — figures more reflective of the real-time economic situation — it only grew 1 percent.
And last month saw retail sales — a key indicator of household spending — slow after a rebound the previous month.
Unemployment also increased slightly to 5.1 percent — but the statistics effectively exclude millions of migrant workers from rural areas.
Official statistics also showed China’s population decline accelerated last year, extending a downward streak after more than six decades of growth as the country battles a looming demographic crisis.
“What China saw last year was possibly the most disappointing post-COVID recovery imaginable,” said Shehzad Qazi, managing director of China Beige Book, a consultancy firm that tracks the Chinese economy.
“The economy limped to calendar’s end,” he said. “Any true acceleration [this year] will require either a major global upside surprise or more active government policy.”
Weighed down by a lack of business confidence and sluggish consumption, China has sought to lure back international investors.
Speaking at the annual meeting of global elites in Davos on Tuesday, Chinese Premier Li Qiang (李強) painted a bullish picture of the economy.
“Choosing the Chinese market is not a risk, but an opportunity,” Li said.
However, risks abound, most prominently in the country’s teetering real-estate market, with last month’s new home prices falling at the fastest pace in about nine years, marking the sixth straight month of declines, NBS data showed.
Property sales by floor area fell 8.5 percent last year while new construction starts plunged 20.4 percent.
Also weighing down the Chinese economy is a lack of jobs for the country’s young people.
NBS resumed the publication of youth unemployment data, which it had suspended for five months.
Last month’s survey-based jobless rate for those aged 16 to 24, excluding college students, was at 14.9 percent, compared with a record high of 21.3 percent in June.
Additional reporting by Reuters
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