China GDP: Beijing’s long to-do list to boost economy in 2024
“The yearly 5.2 per cent growth is achieved on the previous year’s low base and falls short of the widespread expectation of a story recovery at the beginning of 2023,” said Zhu Tian, a professor of economics at the China Europe International Business School in Shanghai.
But focus has already shifted to 2024, with waning investor confidence, a slumping property market, a weak private sector and deflationary risks weighing on its outlook.
“On top of economic growth, other requisites for a confidence boost include a stable property market, receding deflationary pressure, as well as less policy unpredictability,” Yu Xiangrong, chief economist for Greater China at Citigroup, said during a webinar last week.
Property investment, which has been a major drag on the post-Covid recovery, fell by 9.6 per cent in 2023 having dropped by 9.4 per cent in the first 11 months of last year.
The overlapping of property sector stress and the emergence of new growth engines … means China is seeing a dual-track recovery
The property slump also affected the recovery of the private sector, which is a backbone of growth and job creation, as the sector’s investment fell by 0.4 per cent last year, compared with a fall of 0.5 per cent in the first 11 months of 2023.
It is in contrast with a rise of 3 per cent for overall fixed-asset investment last year.
China has pinned its hopes on hi-tech sectors to power its economic growth over the long run as it struggles to shake off heavy reliance on real estate and also counter US tech containment efforts.
“The overlapping of property sector stress and the emergence of new growth engines – like technological innovation, advanced manufacturing and modernised infrastructure – means China is seeing a dual-track recovery,” added Yu.
Retail sales, meanwhile, rose by 7.4 per cent year on year in December, following a rise of 10.1 per cent in November.
Industrial output rose by 6.8 per cent last month, compared to a rise of 6.6 per cent a month earlier.
“This year’s policy combination could be more expansionary, with fiscal and quasi-fiscal policies to be ramped up, supported by monetary tools,” Yu said.