China’s economy grew at the second-slowest rate in nearly half a century last year, indicating that the country’s severe coronavirus laws have hurt enterprises.
The gross domestic product (GDP) of the world’s second-largest economy increased by 3 percent in 2022, according to official data.
This is well below the government’s goal of 5.5%, but better than the majority of economists had predicted.
Beijing abruptly withdrew its zero-Covid policy last month.
The policy had a significant impact on the country’s economic activity last year, but the rapid loosening of the limits has led to an increase in Covid cases, which threatens to impede growth in the first quarter of this year.
Other than at the outset of the pandemic in 2020, when full-year GDP grew by 2.2%, last year’s economic growth was the weakest since 1976, when Chairman Mao Zedong, the founder of the People’s Republic of China, died.
“The information exceeded our expectations. Nonetheless, it illustrates the severe impact a zero-Covid policy and a housing crash in 2022 will have on the Chinese economy “The BNP Paribas bank’s deputy China economist, Jacqueline Rong, stated.
Experts have expressed skepticism over China’s economic data, with some cautioning that the trend of the data is a better indicator of the country’s economic performance than the numbers themselves.
Chinese economic development
Other Chinese economic figures for December, such as retail sales and factory output, were also above estimates but remained below pre-pandemic levels.
“This is hardly negative economic news. Despite the increase in illnesses at the end of last year, domestic consumption nearly seems to have been stable “Qian Wang from the investment firm Vanguard stated.
She continued, “We are entering 2023 with stronger momentum, and this bodes well for economic growth.”
In recent months, economists have expressed concern over the status of the global economy, citing several factors that have an impact on growth.
The World Bank stated last week that the world economy is perilously close to entering a recession.
In its most recent estimate, the organization attributed several things to Russia’s invasion of Ukraine and the impact of the virus.
It was stated that the United States, the eurozone, and China, the three most influential regions in the world for economic growth, were “all experiencing a time of acute weakness,” which exacerbated the issues faced by poorer nations.
GDP is a measurement – or an attempt to measure – the total economic activity of a country’s government, businesses, and individuals.
It assists firms in determining whether to expand and recruit additional employees, as well as governments in determining how much to tax and spend.
Coronavirus limitations hurt 2022 Chinese economy
China’s National Bureau of Statistics revealed on Monday that new home prices fell for the fifth consecutive month in December.
As a result of Covid-19 outbreaks across the country, demand in the final month of 2022 decreased by 0.2%.
Kristalina Georgieva, managing director of the International Monetary Fund (IMF), urged Beijing to continue reopening its economy last week.
Ms. Georgieva stated, “China’s unwavering commitment to this reopening is of the utmost significance.”
“By mid-year or thereabouts, China will become a positive contributor to average global growth if they continue on their current path,” she added.
Since China’s reopening, Yating Xu, chief economist at S&P Global Market Intelligence, has observed evidence of a steady revival in consumer activity, she told.
“A pandemic-policy reversal is less likely in 2023 due to the government’s increasing pro-growth stance and the economic recovery,” she said.
She added, “However, the full reopening of mainland China’s borders is likely to be delayed until international restrictions on travel from China are lifted.”
