Beijing:
Hit hard by the zero-Covid policy and the housing market slump, China’s economy shrank to three percent by 2022, the second-lowest growth rate in 50 years in the world’s second-largest economy, according to official data posted here. are released on Tuesday.
China’s annual GDP will total 121.02 trillion yuan ($17.94 trillion) by 2022, which is below the official target of 5.5 percent, according to the National Bureau of Statistics (NBS).
The sluggish pace was mainly due to the strictly enforced zero-Covid policy leading to periodic lockdowns and the ruling Communist Party’s crackdown on major industrial companies, in addition to the ongoing real estate crisis.
This is the slowest growth of the Chinese economy since 2.3 percent of GDP in 1974.
This year, China’s dollar-denominated GDP has fallen significantly from $18 trillion in 2021 to $17.94 trillion last year, mainly due to a sharp rise in the dollar against the RMB (the Chinese currency) in 2022 .
In RMB terms, China’s economy posted 121.02 trillion yuan last year against the 2021 figure of 114.37 trillion yuan.
GDP growth in the fourth quarter was 2.9 percent year-on-year, compared to 3.9 percent in the third quarter, as it was hit hard by recurring covid lockdowns of several urban centers, including major industrial and business centers such as Shanghai.
Industrial production, a key economic indicator, grew 3.6 percent year-on-year in 2022 and 1.3 percent in December.
China’s fixed asset investment is up 5.1 percent in 2022.
The NBS said “despite the generally stable economic performance”, the basis for economic recovery remains “unstable”.
The country will thoroughly deepen reforms and opening up and focus on strengthening market confidence to promote improvements in the economy to revive the economy, it said.
Last year’s annual GDP growth of 3 percent marked a slowdown from 8.4 percent in 2021, a sharp decline that was due to a host of factors, primarily China cutting itself off from the outside world due to the zero-Covid -policy.
China had set a modest economic growth target of around 5.5 percent for last year, but that remained unattainable due to the impact of the corona virus.
The unemployment rate surveyed in cities, meanwhile, stood at 5.5 percent in December, up from 5.7 percent in November, amid reports that one in five people in China were unemployed.
But according to NBS data, China’s labor market remained broadly stable in 2022.
A total of 12.06 million new jobs were created in the cities last year, surpassing the annual target of 11 million, the data showed.
“The national economy continued to develop despite downward pressure, economic output reached a new level, employment and prices were generally stable, people’s lives were constantly improved, new achievements were secured in high-quality development, and the overall economic and social development was stable and healthy,” Kang Yi, head of the NBS, told the media after the data was released.
However, the foundations of the domestic economic recovery are not solid as the international situation is still complicated and severe, while the domestic triple pressures of demand contraction, supply shocks and weakening expectations are still looming, Kang YI said.
China will make economic stability its top priority and pursue progress and provide stability this year, he said.
The worrying slowdown in the economy came as Chinese President Xi Jinping began his unprecedented third term towards the end of last year, having been re-elected by the once-in-five-year Congress of China’s ruling Communist Party.
In addition to the zero-Covid policy that completely lifted his government this month and opened China to the outside world for the first time in three years, there were a host of other reasons, including the slump in the real estate market and the crackdown on leading corporate houses like Alibaba. responsible for the downturn of the Chinese economy.
International Monetary Fund chief executive Kristalina Georgieva this month asked China to continue reopening its economy.
“The most important thing is that China stays on track, doesn’t shy away from that reopening,” said Kristalina Georgieva.
“If they stay on track mid-year or so around the year, China will make a positive contribution to average global growth,” she said.
Yating Xu, chief economist at S&P Global Market Intelligence, told the BBC she has seen signs of a gradual recovery in Chinese consumer activity since the reopening.
“The government’s increasing pro-growth stance and the economic recovery entering 2023 reduce the likelihood of a pandemic policy reversal,” she said.
“However, the full reopening of mainland China’s borders will likely be delayed until international restrictions against travel from China are lifted,” she said.
(Except for the headline, this story has not been edited by DailyExpertNews staff and is being published from a syndicated feed.)
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