China's GDP grows 3% in 2002 to CNY121 trillion

China's GDP grows 3% in 2002 to CNY121 trillion

China's GDP increased by 3% to CNY121 trillion in 2022. Despite a mild slowdown in the fourth quarter due to an uptick in the Covid-19 infection curve, China still outdid most other major economies, including the U.S., Japan and Germany in 2022, highlighting China's dual role as both the locomotive and the stabilizer of the global economy last year, when its manufacturing capability helped the world tame inflation and stabilize supply chains. Averaged over the past three years, GDP grew 4.57%. With the return of consumer confidence, China is on track for a GDP growth of above 5% in 2023, analysts said, predicting that domestic consumption will be the mainstay of the recovery amid a possible global recession. “In 2022, China's economic output jumped to a new height, topping CNY120 trillion after hitting CNY110 trillion and CNY100 trillion in 2021 and 2020, respectively, and China maintains its standing as the world's second-largest economy,” Kang Yi, Director of the National Bureau of Statistics (NBS), said. He noted that China's GDP per capita stayed above the USD12,000-mark for two years in a row, close to high-income countries as defined by the World Bank.

Industrial added-value rose 3.6% year-on-year in 2022, while fixed-asset investment (FAI) gained 5.1%. Retail sales slumped 0.2% to CNY43.97 trillion in 2022, but it is the second consecutive year above CNY40 trillion, showing that China has kept its position as the world's second-biggest commodity retail market. “The outcome has slightly beaten market expectations, and it is a hard-won result given all the unexpected internal and external short-term shocks, while China didn't resort to stimulus spending like Western countries,” Hu Qimu, Deputy Secretary General of Forum 50, told the Global Times. Germany has released a projected 2022 GDP growth of 1.9%, while the economic output of the U.S. and Japan are estimated to have expanded at less than 2% last year based on an IMF prediction, Kang said. The IMF forecast a 2.4% growth in 2022 for advanced economies.

China's global competitive industries such as new-energy vehicles (NEV), advanced technology and electronic products displayed solid growth, riding the wave of the ongoing industrial upgrading and despite downward pressures. In particular, NEV output skyrocketed at an astonishing 97.5% last year. “It is a good sign that once the shockwaves ebbed, the economy was able to recover quickly on the basis of healthy fundamentals. China has a unique edge in the sheer size of its market. So as long as the economic fundamentals were stabilized, we can withstand external challenges,” Hu said. China's economy grew 8.4% in 2021, and in 2020 – the first year of the coronavirus – GDP rose 2.2%, the only major economy to expand. That translates to an annual growth of 4.5% over the last three years, one of the fastest among major economies.

“It is not an exaggeration to say that the situation in 2022 was more perilous than 2020. Internally, we had sporadic outbreaks in manufacturing bases including Shanghai and Guangdong province that grounded local factories and logistics, as well as a property market slump. Externally, escalating geopolitical tensions drove up bulk commodity prices, subjecting China to skyrocketing imported inflation pressure,” Hu said.

“The main theme of the Chinese economy in 2023 is to regain growth potential,” Hu noted, predicting that GDP could grow 5% to 5.5% this year. Xing Zhaopeng, Senior China Strategist with ANZ Research, told the Global Times that China will see a V-shaped recovery in the next few months to the pre-pandemic level, and its GDP in 2023 is forecast to increase by 5.4%. “A low base and quick normalization from infections will be two major helping hands,” Xing said. Tao Wang, Chief China Economist at UBS, said in a research note that GDP growth could rebound to 4.9% in 2023, led by consumption and helped by property stabilization. Nevertheless, the Chinese economy still faces grim challenges this year, in particular with exports amid sliding global demand, and the country will have to rely more on domestic consumption and investment to shore up the economy, analysts said. Some economists estimate that retail sales could grow 10% this year, equivalent to an increase of CNY4.8 trillion in the total consumption volume. Meanwhile, “infrastructure and manufacturing investment will continue to be the two main drivers, each set to grow 8% to 10% this year, while the dampened real estate sector will strive to stabilize and pick up after the second quarter,” Lian Ping, Chief Economist of the Zhixin Investment Research Institute said.