China posts slowest growth in decades

As recovery stalls

BEIJING – 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 will likely pile fresh pressure on officials to unveil more stimulus measures to kickstart business activity and get the country’s army of consumers spending again.

China’s National Bureau of Statistics revealed that gross domestic product expanded  by 5.2 percent to hit 126 trillion yuan ($17.6 trillion) last year.

The reading is better than the three percent recorded in 2022, when strict zero-COVID 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 United States and those in the eurozone – which each expanded around two percent in 2022 – it is well down from the levels around six or seven percent constantly enjoyed in the 2010s.

After lifting its draconian COVID measures at the end of 2022, Beijing set itself a growth target of “around five percent” for last year.

The economy enjoyed an initial post-pandemic rebound, but ran out of steam within months as a lack of confidence among households and businesses hit consumption.

And statistics last month showed deflation continued for the third month in a row, likely deepening consumer reluctance to spend.

Tensions with the United States and efforts by some Western nations to reduce dependence on China or diversify their supply chains have also hit growth.

China’s GDP figures remain a key source of insight into the health of the world’s second-largest economy, despite being eminently political.

Officials are due to release their growth target for 2024 in March.

NBS commissioner Kang Yi told media that the recovery had been an “arduous task” in 2023, while other data painted a bleak picture of the state of the 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 one percent.

And December saw retail sales – a key indicator of household spending – slow after a rebound the previous month.

Unemployment also increased slightly to 5.1 percent – though the statistics effectively exclude millions of migrant workers from rural areas.

Official statistics also showed China’s population decline accelerated in 2023, extending a downward streak after more than six decades of growth as the country battles a looming demographic crisis.