The year 2023 is history. Before we look to the future, let's think about what will happen to China erstwhile the year 2024 begins, and look at what just went away. Trying to ‘hot’ it sum up.
What was the past year from the Chinese perspective? How can I summarize this briefly?
It was much harder than expected last year. At the same time, it was a time erstwhile much of the goals were achieved.
GDP in quarters I – III 2023: growth by 5.2% in relation to year to year (r/r)
January-November (11 months) 2023:
- Retail sale/consumer: +7.2% (r/r)
- Services: +8.0% (r/r)
- Industrial production: +4.3% (r/r)
- Foreign trade: -5.6% (r/r)
- Investments in fixed assets: +2,9% (r/r)
- Investments in real estate: -9.4%. (r/r)
- Housing sales: -5.2% (r/r)
- Foreign direct investment (January to October): -9.4%. (r/r)
- Inflation: +0.3% (r/r)
[ed.: Let me remind you, due to the fact that I like the Chinese colour red, the colour happy, means growth. The green colour is the drop. That could get a foreign, uninformed investor into quite a few trouble.
This data confirms the increase in economical activity during the 11 months of 2023, despite restrictions, abroad restrictions and temporary detention caused by the COVID-19 epidemic.
At the beginning of January 2023 the economy began to revive – from production, services to consumption. Nevertheless, there are areas that stay problematic and hinder faster development, specified as real property and sectors closely linked to them. So the recovery was not even: different areas of the Chinese economy dealt with different challenges and problems.
About GDP growth, this accomplishment of the assumed minimum level, or 5% (r/r) of the full year 2023 should not be a problem. Sectors peculiarly affected by COVID-19 restrictions, specified as catering, hotel and retail, inactive do not recover the earlier vigor.
Industrial production, although it remains stable, low, it has gradually grown in fresh months 2023, which bodes well for 2024. Consumption is increasing very slow and has inactive not regained full possible before the epidemic. Records are listed in the sale of cars and electronic commerce. The value of services is increasing.
Foreign trade grew promising until May. advanced inflation and increased cost of maintaining consumers in key abroad markets – mainly in the US and Europe – reduced request for Chinese goods in 2023. However, the last months of the year indicate the rebirth of abroad trade. This is an crucial component determining the improvement of the economy in the fresh year.
Image investments is diverse. In the infrastructure sector, growth is unchangeable (approximately 6% y/y). advanced investments have been recorded in high-tech production and services (average over 10% y/y). On the another hand, investment in the real property sector is simply a large shadow on the performance of the full economy. Although the rate of their decline is no longer 2 figures, these investments are inactive decreasing. The real property marketplace crisis is inactive ongoing, with successive Chinese developers on the brink of insolvency.
Decreased values Foreign investment, like the turbulence in the real property marketplace or in abroad trade, has given decision-makers peculiarly many concerns. This drop, by nearly 10% (r/r), cannot be considered a good signal. However, the number of recently registered abroad companies in 2023 increased by 32.1% (r/r). A full of 41947 fresh abroad capital entities were registered in China last year. The main investment was in the production of advanced technologies (an increase of 9.5% y/y) and industrial (an increase of 1.9% y/y). A decrease of 15.9% (r/r) in the service sector was noted.
Despite many economical problems faced by the government in 2023, the decision to introduce universal stimulation packages, as in 2020. The focus was on supporting those areas of the economy that are clearly struggling and falling behind.
A lot of attention has been given to SMEs.
A peculiar aid strategy was adopted in July for those private companies that inactive face the effects of COVID-19 restrictions between 2020 and 1923.
The private sector is liable in China for over 50% of taxation revenues, for over 60% of GDP, for over 70% of technological innovation, employs over 80% of employees in cities and accounts for over 90% of all companies in the country. It is an highly crucial part of the economy.
To support local governments, their projects and economics, in late October the government decided to issue bonds worth 1 trillion RMB (about PLN 548,8 billion).
What else did the year come?
– Exchanges They've reported the worst in 3 years. More capital was flowing out than it was coming to China. This is the consequence of the real property crisis, the advanced debt of local governments and the deficiency of investor assurance in the stableness of China's economical development.
– Investments in technology – Tens of billions were invested in areas specified as artificial intelligence, semiconductors, 6G network, quantum computing and computers, large data, cybersecurity and blockchain. The funds came from central and provincial funds. China is gradually gaining a global competitive advantage in these areas. American sanctions and restrictions to reduce technological improvement China proved to be ineffective.
– Scientific and method breakthroughs: own passenger plane C919, orbital station, rover on the dark side of the Moon and on Mars, integrated circuits, Harmony operating system, high-quality lithium-ion battery.
– China’s abroad policy focused on strengthening political and economical ties with Russia, resulting in evidence trading, a transition to transactions based solely on own currencies – RMB and ruble. China became Russia's largest economical and investment partner.
Despite many authoritative visits and the November summit of state leaders, tensions from United States They don't shrink, and there's no improvement in relations. China ends the year as 1 of the world's key players in economic, political and technological terms. They strengthened their relations with the countries of Africa, Oceania, South America, Southeast Asia and the mediate East.
– Political change, in March, during the yearly session of the National Assembly of People's Representatives (Parliament) was elected for a four-year word of fresh Prime Minister and Government. Li Qiang (chin. 李强) took the lead of the government, nevertheless he performs mainly general functions alternatively than actual management. All economic, financial and social affairs are headed by Deputy Prime Minister He Li Feng (chin. 何立峰). 3 staff changes in key government ministries (foreign affairs, finance and national defence ministries), only a fewer months after the fresh heads of ministries took office, were unprecedented events in the past of modern China. The position of Minister of Defence remained vacant almost until blanket 2023. On December 29, this position was taken by the erstwhile commander of the Chinese Navy, Dong Jun.
In summary:
After growth in the second and 3rd quarters and affirmative indicators in October and November, it is almost certain that China's economy will accomplish its main nonsubjective in 2023. In addition to affirmative GDP data, it is besides crucial that economical areas specified as abroad trade have started to show a affirmative trend in the last months of the year.
China ends 2023 again as the world's second economical power after the United States. Last year 28.7% of global industrial production came from China, which is inactive the engine of planet growth and accounts for 1 3rd of global GDP.
32% of global investment was located in the Central State.
China is the largest exporter in the world. They play a key function in areas specified as renewable energy sources (e.g. solar panels, wind turbines, electrical cars), have the longest high-speed rail network, Chinese shipyards build most of the ships ordered by shipowners building a worldwide transport network on the seas and oceans.
W China lives the largest number of net users and smartphones.
This is only a very modest part of the information on events and trends recorded in China in the past year. There were many of them, they were of a different nature, they were of a different scale, they afraid very different areas of activity of the state inside and outside. The ones that we considered to be crucial were presented on the Chiny24.com website, as well as in social media, podcasts and videocasts created thanks to the support of listeners and viewers.
To be continued!
The next article will present the objectives and challenges facing China in the beginning of 2024.
I hope he's the best for you!
Author: 梁安基 Andrzej Z. Liang, 上海 Shanghai, 中国 China
Email: [email protected]
Editorial: Leszek B.
Email: [email protected]
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