Unlocking the Secrets of China’s Q4 and Full-Year GDP

China’s National Bureau of Statistics will release its quarterly expansion estimate on Tuesday, which is expected to show a third consecutive disappointing growth rate. The Chinese economy is not meeting the government’s annual growth target of 5.5%, which is the lowest mark in decades. In the second quarter, the economy barely avoided contraction with a 0.4% year-on-year growth, and it expanded by 3.9% in the third quarter, which was delayed during the Communist party congress. The fourth-quarter reading will also be affected by widespread lockdowns and the abandonment of President Xi’s zero-Covid policy during the October-to-December period.

The latest China economic news suggests continued steady growth, despite ongoing trade tensions with the United States. Experts are closely monitoring several key indicators, including industrial output and retail sales, to gain insight into the health of the world’s second-largest economy. While there may be some uncertainty in the short-term, many analysts remain optimistic about China’s economic prospects in the long term.

China Economy Expects Bright Outlook for 2023

In contrast to the disappointments of last year, this year’s prospects for the Chinese economy are predicted to be much more promising. The Chinese economy will rise fully by 2.7% in 2022, and then by 4.3% in 2023, according to the World Bank. The official government growth target for 2023, which is often unveiled at the annual session of the National People’s Congress in March, is probably 5% or higher. Some of China’s largest provinces anticipate growth of 5% to 6%. The abandonment of the zero-Covid policy, according to Larry Hu, chief China economist at Macquarie, has sped up the pandemic’s end and indicates a bigger economic contraction in the fourth quarter of 2022, but a quicker reopening and recovery in 2023.

China’s Export Decline Signals Weaker Overseas Consumer Demand

The first dip since the pandemic started in 2020, China’s exports fell by 0.3% in US dollar values in October. At 8.7% and 9.9%, respectively, the fall in November and December was even more substantial. It seems unlikely that the declining international consumer demand, which had been bolstering China’s economy throughout the pandemic, will soon resume. The administration will find it more difficult to handle the high young unemployment rate, which has increased from 12.3% to 17.1% over the past two years, as a result.

China’s Demographic Decline: A Threat to Economic Prosperity

China’s population is rapidly aging, which is a long-term danger to the country’s ability to prosper economically. China’s ambitions to surpass the United States as the greatest economy and attain a high level of income per capita will probably be hampered if this trend continues. China was on the verge of experiencing its first population decline since the Great Leap Forward famine in 2021 with 10.62 million births and 10.14 million deaths. The rise in Covid-19-related mortality in the nation has increased this risk.

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