ALBAWABA — China's economy grew 3 percent in 2022, according to its National Bureau of Statistics (NBS) data released on Tuesday, marking one of the country’s worst performances in nearly half a century.
The data showed numbers far below the government’s target with one of the weakest growth rates in 40 years due to the ongoing real estate crisis, slumping exports as the global economy slows, inflationary pressures, and the longstanding zero-Covid strategy, which was abandoned last month after sizeable protests.
Beijing had set a target gross domestic product (GDP) growth rate of 5.5 percent for 2022, a rate already much lower than its performance in 2021, when GDP increased by more than 8 percent.
“The Chinese economy is at a pivotal point, with disruptions from the protracted zero-Covid policy and its abrupt reversal likely to give way to a resurgence of at least moderate growth by Chinese standards,” Eswar Prasad, a China finance expert at Cornell University, told the Financial Times.
“Growth momentum coming out of this difficult period will depend on how much and what kind of stimulus the government employs to put the economy back on track,” Prasad added.
In the fourth quarter, GDP was flat compared with the third quarter and rose 2.9 percent year-over-year, higher than analyst expectations of a 1.6 percent increase, according to NBS data.
China's industrial output rose 1.3 percent in December from a year ago, while retail sales contracted 1.8 percent in the same period. Fixed-asset investment gained 5.1 percent last year, and the urban jobless rate fell to 5.5 percent last month from 5.7 percent in November, with the economy starting to show healthier growth signs.
"The good news is that there are now signs of stabilization, as policy support doled out towards the end of 2022 is showing up in the relative resilience of infrastructure investment and credit growth," Louise Loo, Senior Economist at Oxford Economics, said in a note, reported Agence France-Presse.
China’s economy is expected to recover this year as it reopens to the world, but the NBS data highlighted the scale of challenge it faces, with the World Bank forecasting modest growth for China's GDP at a rate of 4.3 percent in 2023.
The NBS also revealed that China’s population declined for the first time since 1961, dropping to 1.4118 billion people in 2022, compared to 1.4126 billion in 2021, paving the way for major ramifications for potential economic growth, and lower domestic demand for many years to come.
