slowed down by Covid zero, growth is slowing to 3%

slowed down by Covid zero, growth is slowing to 3%

China saw its gross domestic product grow by 3% in 2022, announced the National Bureau of Statistics (BNS).

This figure is well below the 5.5% target set by the communist regime. This is the first time that the giant has missed its official target on such a scale.

Correspondent in Asia

Stuck in Zero Covid, China recorded growth of 3% in 2022, one of the weakest performances for forty years, unveiled Beijing on Tuesday morning. This figure is well below the 5.5% target set by the communist regime, signaling the extent of the impact of the draconian health measures, just lifted. This is the first time that the giant has missed its official target on such a scale. The second world economy has experienced its weakest annual growth since the 1976 recession, except for the year 2020 marked by the blockade of Wuhan, on the eve of the pandemic (2.3%).

The authorities who had given up announcing the figures for the 3e quarter of 2022 on the eve of the Party Congress in October, tried this time to highlight the giant’s resilience, in the face of “headwinds, and the choppy waters of the global environment“.

SEE ALSO – Covid-19: “WHO still thinks deaths are grossly underreported in China”

“Multitude of problems”

During the last three months of the year, growth stood at 2.9%, showing no improvement compared to the previous financial year, under the screed of zero Covid, the abrupt lifting of which has not been announced. only at the beginning of December, in the aftermath of demonstrations across the main cities of the country.

National economy continued to grow despite downward pressure», Rejoiced the National Bureau of Statistics (BNS) before admitting structural difficulties, anticipating a year 2023 full of challenges. “The foundations of domestic economic recovery are not solid, while the international situation is still complicatedsaid Kang Yi, the head of the BNS. Especially since China’s population declined for the first time since the 1960s, according to statistics released on Tuesday, beginning a historic demographic shrinkage. “China’s economy faces a host of problems, from aging to debt“Judge Alicia Garcia Herrero, chief economist at Natixis.

Main Achilles heel, the weakness of consumption remains, and retail sales fell by 1.8% in December, for the third consecutive month. Over the year as a whole, they show a drop of 0.2%, while industrial production fell to 1.3% in December, to increase by 3.6% in 2022.

The lifting of health restrictions should lead to a robust rebound in activity in the first half of the year, supported by Beijing’s stimulus measures, economists say. In 2023, China will record growth of 4.3% according to the World Bank, or even 5.2% according to Goldman Sachs, offering balm to the hearts of investors worried about the landing of the giant and the growing geopolitical tensions with the United States, at the time of the war in Ukraine. The country can rely on its exports which have better resisted the pandemic, confirming the still key role of the Middle Kingdom in global production chains.

A year of the Rabbit full of challenges

But this catch-up will not be enough to stem the slowdown against a backdrop of structural difficulties, believe many economists. “China will rebound but it will be purely statistical, because the starting base is very low. Wall Street will want to believe it, but the economy is sick of its dependence on real estate, of aging. The Covid has aggravated these factors“Judge Chang Kung, founder of the independent think tank Anbound, in Beijing. A sign of the concern of the middle classes, investments in stone fell by 10% in 2022, while many promoters are heavily indebted.

Voluntarist, Beijing promises to support the recovery, but its financial leeway is shrinking, and has made “stability» the key word, at the beginning of a year of the Rabbit full of challenges.

SEE ALSO – China’s population drops for the first time since the early 1960s

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