As of: January 22, 2024, 9:06 a.m
By: Christiane Kühl
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Steel workers in Hangzhou: China's economy is growing faster again, but the challenges remain great.
© STR/AFP
China's economy has grown by a good five percent.
This is better than a year ago.
But the challenges are still there: many crises, weak demand and a difficult world
At the beginning of January, the world is always eagerly awaiting China's economic data for the past year.
What happens in the largest growth engine of the global economy has great significance for the rest of the world.
At the beginning of 2023, there was great disappointment: Beijing only reported around three percent growth for the zero-Covid year 2022. Now things were a little better: China's gross domestic product (GDP) rose by 5.2 percent in 2023 to the equivalent of around 16 trillion euros the National Statistics Office announced on Wednesday.
The growth therefore slightly exceeded the official growth target of “around five percent”.
The Prime Minister responsible for China's economy, Li Qiang, had already revealed the growth figure on Tuesday at the World Economic Forum in Davos.
There, Li praised his country's successes and appealed for trust and investment.
There are 400,000 high-tech companies in the country, which is responsible for 30 percent of global economic growth, said Li. "Choosing China's market is not a risk, but an opportunity."
But China's problems are still big, and the statisticians also know that.
After a brief boom in response to the end of the Corona policy at the beginning of 2023, the economy had lost significant momentum in the spring.
China's growth in 2023 will be "hard-fought," said the head of the statistics office Kang Yi in Beijing.
The economy is facing a complex external environment and will continue to face insufficient demand in 2024.
The government is countering the weak economy with numerous smaller aid measures: targeted interest rate cuts, financial injections or tax incentives for certain sectors.
Economists at the World Bank still only expect growth of 4.5 percent this year.
China: Crises dampen demand
The difficult external environment mentioned by Kang Yi was reflected in the trading figures.
Due, among other things, to weaker global demand, exports fell by 4.6 percent in 2023.
China's imports fell by 5.5 percent.
Meanwhile, domestic demand is suffering from several simultaneous crises: the real estate market has collapsed, consumption is weakening due to great insecurity among people, and investments have fallen sharply.
And another factor has been causing concern in Beijing for some time: demographics.
As the statistics office surprisingly announced on Wednesday, China's population fell by two million in 2023 - for the second year in a row.
It is therefore clear that China, with now 1.409 billion people, has passed the peak of its population development.
China will lose around two million citizens in 2023
The number of annual births fell for the seventh time in a row in 2023, although slightly less sharply than in previous years.
A good nine million babies were born - only half as many as in 2016. At the same time, the number of deaths rose significantly from 10.4 to 11.1 million.
The Beijing statisticians remained silent about the causes of death - but a connection with the pandemic and the sudden end of the zero-Covid policy in December 2022 is obvious.
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What is more difficult for China's future is the decline in birth rates.
This means that fewer workers will be available in the medium term and fewer consumers will buy products and services.
This trend will weaken China's economy in the long term;
The previously endless pool of young workers that China's companies relied on for decades is already beginning to dry up.
India will overtake China as the world's most populous country in 2023;
The average age there is 28 years, in China it is 39 - and the trend is rising.
China will get old before it gets rich.
Surprising data: China's youth unemployment has fallen again
Surprisingly, the statistics office released figures on youth unemployment for the first time since last summer.
According to this, 14.9 percent of 16 to 24 year olds are without a job.
In the summer of 2023, the rate was over 20 percent - until Beijing suddenly stopped publishing the statistics, supposedly to adjust them.
The new quota now better reflects the employment of young people, said Kang Yi.
Pupils or students were no longer taken into account if they searched in vain for a part-time job.
Overall, 5.1 percent of people in China were unemployed - but this only looks at people in the cities and not the country's many millions of migrant workers.
Quite a few of them may have lost their jobs due to the crisis in the construction sector.