The Chinese economy grew by 4.5 percent year-on-year in the first quarter of 2023, indicating that the world’s second-largest economy is now firmly on the path to recovery after the end of Beijing’s strict ‘zero-COVID’ policies.
The growth rate exceeds market estimates even though it is slightly below Beijing’s aim of 5% growth for 2023, which was announced at the National People’s Congress meeting in March.
Additional official economic data that was provided on Tuesday confirmed indications of an upswing in the economy.
Retail sales grew by 10.6 percent year-on-year, according to data from the National Bureau of Statistics, while value-added service output rose by 5.4 percent.
Value-added industrial production rose by 3 percent year-on-year, although the Purchasing Manager’s Index, a measure of China’s manufacturing trends, dropped slightly to 51.9 from 52.6 in February. Any reading above 50 is considered an expansion.
Read Also: We Won’t Send Weapons To Russia, China Assures US, NATO
Alicia Garcia Herrero, the chief economist for the Asia Pacific at Natixis, said the “data was quite good” but that official figures may paint a slightly rosier picture than the reality on the ground because the benchmark is March 2022, when economic activity across China was muted due to lockdowns.
Africa Today News, New York recalls that China’s economy grew by just 3 percent last year, the second lowest rate since 1976, amid strict pandemic measures, including border closures, mass testing, and months-long lockdowns in big cities such as the financial powerhouse of Shanghai.
Beijing is now trying to steer the economy through a recovery without stoking the kind of inflation seen in other countries, Garcia Herrero said. China’s consumer price index grew by just 0.7 percent year-on-year in March, despite rebounding retail sales.
China’s Communist Party has made economic stability a top priority in 2023, with a particular focus on job creation to offset high youth unemployment during the pandemic.
Beijing said earlier this year it plans to create 12 million jobs, up from 11 million this year, while pinpointing consumption as a key driver of growth.
Public frustration with Beijing’s ‘zero-COVID’ strategy and its effect on the economy sparked a wave of rare mass protests across China’s big cities in late 2022.
The protests are believed to have been a deciding factor in Beijing’s abrupt decision to drop its tough pandemic strategy in December after nearly three years of strict curbs.