China’s GDP Growth Rate in 2022 Hits Lowest Level in 40 Years
The Chinese economy faced great difficulties in 2022, with the official GDP growth rate dropping to 3%, one of the lowest levels in the last 40 years, due to the covid-19 pandemic and the crisis in the real estate sector.
Beijing had set a low expectations of 5.5% expansion in 2021, lower than the 8% growth witnessed in the previous year.
The rigid adherence to the zero covid strategy resulted in isolating the country and affecting many aspects of the global supply chain, further impacting the global economy.
Kang Yi, from the National Bureau of Statistics (ONE) expressed that China last year “faced storms and troubled waters in the international environment.”
However, the GDP growth exceeded analyst expectations of 2.7%, with the fourth quarter of last year posting at 2.9%, down from 3.9% a year before.
Chinese industrial production grew 1.3% in December, while retail sales fell 1.8%.
Investment in fixed assets rose 5.1% last year.
Economists note that policy support and lending in the tail end of 2022 will help in stabilizing the economy, further strengthened by a rebound of infrastructure investment and credit growth.
Nevertheless, China is facing a rebound in covid-19 infections and problems continue to loom in the real estate sector due to excessive debt and speculation.
This has been addressed by the government’s recently announced measures to ensure enough financing to construction companies and reviving housing demand, which could help stabilize the real estate sector.
Looking ahead, the World Bank projects that China’s GDP will rise to 4.3% in 2023, below expectations. It is expected that the road to recovery is likely to be bumpy and that China may face short-term setbacks followed by a strong rebound.
