As reported by Chinese Premier Li Qiang during the World Economic Forum, China’s economy demonstrated robust growth, surpassing the government’s initial target of 5% and achieving a notable 5.2% expansion. The growth rate not only exceeded the economic performance in 2022, where the economy only achieved a modest growth rate of 2.9%, primarily due to covid-restrictions, but also highlighted the resilience and recovery of the Chinese economy.
Examining the performance on a quarterly basis, China’s economy exhibited a noteworthy upswing towards the close of the year. The growth rate in the final quarter surpassed that of Q3, culminating in an impressive growth rate of 5.2%. This positive trajectory suggests a dynamic economic landscape and reinforces China’s position as a key player in global economic recovery.
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Unemployment Rate Levels Decrease
The surveyed unemployment rate averaged at 5.2% in urban areas in 2023, which is 0.4% lower than the rate recorded in the previous year. However, the unemployment rate did see an uptick from the previous month to average out at 5.1% in the final month of December.
Imports and Exports Generally Stable
The total value of imports and exports in 2023 increased by over 0.2% relative to the previous year. The total value of exports increased by 0.6% year-on-year and the total value of imports decreased by 0.3% year-on-year.
Purchasing Managers Index (PMI)
The Purchasing Managers Index (PMI) is a key indicator used to predict and track macroeconomic trends, specifically focusing on activities like production, purchasing, and logistics in enterprises. The composite index reflects changes in output levels for both manufacturing and non-manufacturing sectors. A PMI above 50 indicates expansion, while below 50 signals economic contraction.
In October, the Purchasing Managers Index (PMI) decreased by 0.7 percent to 49.5, indicating a slight contraction. In November, the PMI for the manufacturing industry was 49.4 percent, a 0.1% drop from the previous month. The PMI in December for the manufacturing industry further contracted to 49.0%, indicating a marginal decline in climate of the manufacturing industry.
Steady Recovery in the Value of Industrial Enterprises
In 2023, the total value added of industrial enterprises above the designated size demonstrated a growth of 4.6% over the previous year. The total value added of the industrial enterprise in December increased by 4.4 % year on year, and 0.52% month on month.
Retail Sales Grows Rapidly
Total retail sales of consumer goods increased by 7.2% over the previous year, with a 7.1% year on year growth in urban areas and 8.0% growth in rural areas.
Outlook for 2024
Amidst considerable speculation surrounding China’s economic trajectory in 2024, the government has explicitly reaffirmed its commitment to creating a world-class operating environment for foreign businesses wanting to operate in the market. With a large consumer base, strong manufacturing capabilities and a steadfast commitment to develop policies in order that enhance conditions for the private sector, China aims to stay on track for its growth target over the coming year.
