The Chinese Economy Grew in 2022 at the Second Lowest Rate Since the 1970s
The Chinese economy grew in 2022 at the second-lowest rate since the 1970s. The world’s second-largest economy was still struggling last year with the consequences of strict corona policies, which put pressure on production and consumption in the country.
China’s gross domestic product (GDP), the measure of economic growth, rose by 3 percent last year, the Chinese bureau of statistics reports. That is the worst economic figure since the contraction of 1.6 percent in 1976, except for the year 2020, which was ravaged by the corona pandemic. In 1976, Mao Zedong, the founder and first leader of the People’s Republic of China, died.
Growth in 2022 was higher than the 2.7 percent that economists had expected. The economy grew by 2.9 percent in the last quarter compared to a year earlier. Economists had expected growth of 1.6 percent.
In 2021, the economy still grew by more than 8 percent, after a growth of 2.2 percent in the first corona year of 2020. Beijing had set itself a growth target of 5.5 percent for 2022, but that was undermined by the strict zero-covid policy that was in in the largest part of the year in effect. China began lifting its strict corona measures early last month after protests against the policy, but the country has since experienced a huge spike in corona infections.
Economists expect a stronger recovery in the coming months as consumer spending increases and the housing market slump eases. Economists polled by Bloomberg news agency expect growth to accelerate to 4.8 percent this year. Some large banks, such as Morgan Stanley, Bank of America and Citigroup, expect growth to be around 5.5 percent or higher.
In addition to the economic growth figure, other macroeconomic figures for December were also published. For example, it turned out that retail sales, an important indicator of consumer spending, fell by 1.8 percent last month, while economists had expected a much larger decline. Industrial production also increased more than expected in December by 1.3 percent.