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China: economy misses growth targets


The second largest economy in the world grew by just three percent last year. Analysts explain this with the formerly uncompromising corona policy - and with a demographic problem.

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Passer-by in Beijing: second worst year since 1976


Andy Wong / dpa

Bad news from the Chinese economy: Gross domestic product (GDP) grew by just 3.0 percent in 2022.

This means that China is clearly missing the national target and is no longer the world's growth engine.

In 2021, GDP in the second largest economy after the USA had grown by 8.4 percent.

For 2022, the leadership in Beijing aimed for a GDP increase of around 5.5 percent, but could not keep it in view of the zero-Covid strategy with strict lockdowns that had been pursued for a long time.

With the exception of the 2.2 percent growth after the first corona wave in 2020, 2022 is even the weakest year since 1976, according to data from the National Statistics Office released on Tuesday.

GDP growth slowed considerably, particularly in the fourth quarter.

At 2.9 percent, the year-on-year increase was far lower than in the summer (plus 3.9 percent).

The Chinese economy even stagnated at the end of the year compared to the previous quarter.

»The year 2022 was disastrous for the Chinese economy.

For an industrialized country, growth of 3.0 percent may be very good - for China it feels like a recession," concludes Thomas Gitzel, chief economist at VP Bank in Liechtenstein.

According to a survey by the Reuters news agency, growth in the current year is likely to increase again to 4.9 percent because China's political leadership has now abandoned the zero-Covid strategy.

Beijing wants to tackle the crisis in the real estate sector.

Most economic experts expect growth to pick up again from the second quarter.

In December, under pressure from the sluggish economy and after protests critical of the government, the communist leadership announced an abrupt departure from its strict zero-Covid policy.

Since then, a corona wave has been rolling through the country.

In view of the brisk travel for the Chinese New Year celebrations on January 22, the situation could worsen.

According to economic experts, this explosive corona situation can further impair growth in China in the short term.

"With the support of politicians and the central bank, the economy should turn the corner from spring," argues chief economist Alexander Krüger from Hauck Aufhäuser Lampe Privatbank.

However, higher growth rates would then hardly be maintained, since China had moved away from the goal of maximizing growth.

The former growth engine of the world will permanently develop significantly less traction.

Population shrinks for the first time

There is also a demographic problem: for the first time since the great famine between 1959 and 1961, the population has shrunk.

The National Bureau of Statistics put the number of Chinese at 1.41 billion at the end of 2022, down about 850,000 from the year before.

"China's demographic and economic prospects are much bleaker than expected," demographics expert Yi Fuxian assessed the new data.

"China will have to adapt its social, economic, defense and foreign policies." This means that India is likely to become the most populous country in the world this year.

A historically low birth rate of just under 6.8 per 1000 inhabitants contributed to the development in 2022.

At the same time, the death rate rose to 7.4 per 1,000 inhabitants, the highest level since the Cultural Revolution in 1974. The further expected development can also be derived from the decline in the number of women of childbearing age: it fell by around four million.

The United Nations now assumes that the population will shrink by 109 million by 2050.

That is more than three times as much as predicted in 2019.


Source: spiegel

All business articles on 2023-01-17

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