17-1-2024 (BEIJING) China’s economy suffered a significant blow last year, recording one of its worst annual performances in over thirty years, according to official figures released on Wednesday. The country grappled with a crippling property crisis, sluggish consumption, and global turmoil, leading to a growth rate of 5.2% in gross domestic product (GDP), reaching 126 trillion yuan ($17.6 trillion), as reported by the National Bureau of Statistics (NBS).
Despite the political nature of official GDP figures, they remain a crucial source of insight into the health of the world’s second-largest economy. Wednesday’s reading represents an improvement compared to the 3% growth seen in 2022, a year heavily impacted by stringent health measures implemented to contain the virus. However, excluding the pandemic years, this performance marks the weakest since 1990.
Following the relaxation of Covid-related restrictions, Beijing had set a growth target of “around five percent” for 2023. Officials are expected to announce this year’s target in March.
Although the economy experienced a rapid rebound after the removal of zero-Covid measures at the end of 2022, the momentum quickly waned within months due to a lack of confidence among households and businesses, severely affecting consumption. Additionally, the Chinese growth engine has been hindered by an intractable real estate crisis, soaring youth unemployment rates, and a global slowdown.
China’s exports, historically a crucial driver of growth, declined last year for the first time since 2016, according to data released by the customs agency last Friday. Geopolitical tensions with the United States and efforts by some Western nations to reduce reliance on China or diversify their supply chains have also taken a toll on the country’s economic growth.
