China's 3% GDP Growth One of Its Worst in Decades

China's economy expanded well below the government target in 2022, growing by just 3% — one of the worst performances in nearly half a century — largely due to frequent COVID outbreaks and lockdowns, extreme heatwaves, and a historic downturn in the property market.

China's 3% GDP Growth One of Its Worst in Decades
Image credit: Bloomberg/Getty Images [via CNN]

Facts

  • China's economy expanded well below the government target in 2022, growing by just 3% — one of the worst performances in nearly half a century — largely due to frequent COVID outbreaks and lockdowns, extreme heatwaves, and a historic downturn in the property market.
  • Beijing had set a target growth rate of 5.5% last March, but the data unveiled on Tuesday by the PRC's National Bureau of Statistics was better than the 2.8% forecast in a Reuters poll.
  • This comes as China's fourth quarter growth beat market expectations, expanding 2.9% in October-December from a year earlier but slower than the third quarter's 3.9% pace. This is the second worst level since 1976, the final year of the decade-long Cultural Revolution.
  • China's economy is expected to be boosted in 2023, with investment bank Chanson & Co's managing director Shen Meng stressing that a 5% growth target is likely to be settled as Beijing dismantles its "zero-COVID" policy and reopens the country to the world.
  • China's strict zero-COVID pandemic policy impacted the PRC's economy towards the end of 2022, with lockdowns slowing down growth in Shanghai and Guangzhou.
  • Zero-COVID was curtailed in early December in synch with a viral outbreak, but PRC officials maintain that the economy will rebound after the infection's peak.

Sources: CNN, CNBC, Reuters, Forbes, Al Jazeera, and New York Times.

Narratives

  • Anti-China narrative, as provided by The New York Times. The outlook for the Chinese economy is uncertain as the property sector is weighed down by enormous corporate debt and the Chinese population has begun to shrink. It's unclear if some workers will come back to their cities of work after Lunar New Year travels. Worse yet, foreign demand has fallen due to higher interest rates which have dampened the demand for imported goods from China.
  • Pro-China narrative, as provided by Xinhua News. The PRC's economy is certain to improve this year. The signs are there, showing a vast market potential that will result in growth. China has made economic stability its top priority for the new year and will pursue progress while ensuring stability. Compared with other major economies the 3% growth rate is relatively remarkable. The worsening global economic situation needs China's steady growth as a stabilizer. Clearly, the latest figures show that China is maintaining its position as the world's second-largest economy.

Predictions