China’s key indicators show positive signs of growth
Key economic data for the first two months of 2023 show that China’s economy is stabilizing and beginning to grow, according to the National Bureau of Statistics (NBS).
The NBS said that consumer spending, investment and industrial output all rebounded in January and February, with retail sales — a key measurement of consumer confidence — growing 3.5% year-on-year in the January-February period. It fell by 1.8% in December 2022.
Fixed-asset spending, on items such as infrastructure, property, machinery and equipment — increased by 5.5% during the two-month period, compared with a 5.1% rise for the whole of 2022.
“The uptrend in China’s economic activity was broad-based in January-February, with retail sales and investments more or less in line with expectations,” Louise Loo, China lead economist at British think tank Oxford Economics, told the China Daily website.
Citing official data, she said that factory output also increased after slowing for three months, consistent with the improving purchasing managers index data for the January-February period, and consistent with reports of easing supply chain bottlenecks.
According to Loo, slower growth in industrial production was a sign of weaknesses in overseas demand. China’s industrial output — measuring the country’s manufacturing, mining and utilities sectors — grew by 2.4% in the January-February period from a year earlier after a 1.3% rise in December, slightly lower than the 2.6% anticipated by a Reuters poll of leading economists.
China’s government has set an economic growth target of around 5% for 2023, which officials and analysts believe is a pragmatic and achievable goal. The country’s economy grew by just 3% year-on-year in 2022.
NBS spokesman Fu Linghui said that China’s potential growth rate is widely projected to stay between 5% and 7%, adding that “the country has the conditions, foundation and confidence to achieve the target this year despite challenges”.
However, Fu said that despite the improvement in key economic indicators, the NBS also warned of challenges from more complicated world economic conditions and insufficient demand, saying China’s economic recovery foundation is “not yet solid”.
Going forward, the NBS said the country “must remain committed to the general principle of pursuing progress while ensuring stability, fully apply the new development philosophy on all fronts, work faster to create a new development pattern and pursue high-quality development.
“More efforts will also be made to accelerate the implementation of policies, boost market confidence and advance the overall improvement of economic performance.”
Wen Bin, chief economist at China Minsheng Bank, said the country’s GDP growth will likely hit 5.5% or higher this year, with supportive policies taking effect gradually and improving market confidence.
Property market shows signs of recovery
Property investment and sales data from the National Bureau of Statistics indicate that recovery is taking place in the real sector, boding well for further market stabilization and providing a confidence boost in the coming months, experts said.
“The greatest change for real estate in the first two months was the positive growth in floor space of completed construction, ending 11 consecutive months of declines, which reflects the efforts in ensuring real estate property deliveries for over a year have made promising progress,” said Li Yujia, chief researcher at the Guangdong Planning Institute’s residential policy research centre.
The amount of real estate construction being completed 131.78 million square meters, up 8% year-on-year, among which 97.82 million sq m of residential space was finished during the January-February period, up 9.7% from a year ago, NBS data showed.
From January to February, commercial housing sales fell 3.6% year-on-year in terms of floor area to 151.33 million sq m, edging down 0.1%.
The figures for residential real estate are more encouraging as housing sales saw a year-on-year growth of 3.5% in terms of value.
