China faces slowest economic growth since 1990 amid property crisis and global challenges

The National Bureau of Statistics disclosed that gross domestic product (GDP) reached 126 trillion yuan ($17.6 trillion) last year, representing a notable deceleration from the robust growth rates observed in the previous decade.

China experienced one of its slowest economic growth rates in more than three decades in the past year, with official figures revealing growth of 5.2 per cent, marking the weakest performance since 1990, excluding pandemic-affected years. The figures, while surpassing Beijing’s target and exceeding expectations, highlight challenges posed by a severe property crisis, sluggish consumption, and global economic uncertainties.

The National Bureau of Statistics disclosed that gross domestic product (GDP) reached 126 trillion yuan ($17.6 trillion) last year, representing a notable deceleration from the robust growth rates observed in the previous decade. Despite surpassing the growth rate of major economies like the United States and the eurozone in 2022, the 5.2 per cent expansion falls significantly below the levels of six or seven per cent seen in the 2010s.

The economic rebound, following the strict zero-COVID measures of 2022, faced headwinds as confidence waned among households and businesses, impacting consumption. Additionally, China’s exports, a historical growth driver, experienced a decline for the first time since 2016, contributing to the economic challenges.

Geopolitical tensions with the United States and efforts by Western nations to reduce dependence on China have further complicated the economic landscape. Though viewed as a crucial indicator of China’s economic health, the GDP figures remain subject to political considerations.

NBS Commissioner Kang Yi acknowledged the “arduous task” of the recovery in 2023, with data indicating a one per cent growth between the third and fourth quarters, reflecting real-time economic challenges. December witnessed a slowdown in retail sales, a key indicator of household spending, following a rebound in the previous month.

The unemployment rate increased to 5.1 per cent, though this figure effectively excludes millions of rural migrant workers. China’s population decline also accelerated in 2023, heightening concerns about a looming demographic crisis.

As China looks to navigate economic challenges, Premier Li Qiang emphasized the nation’s commitment to opening up to the outside world at the Davos meeting. However, risks persist, particularly in the real estate market, where financial troubles at major firms have eroded buyer trust and impacted the overall economy.