Chinese Premier Li Qiang had already revealed China's official GDP growth rate for 2023 – 5.2% – during the Davos talkfest in Switzerland on Tuesday, a day before the country's National Bureau of Statistics was set to release the official data on Wednesday.
During the conference, Premier Li mentioned that the Chinese economy had rebounded and grown at an estimated rate of around 5.2% in 2023, surpassing the official target of approximately 5%. However, this figure fell slightly short of market forecasts, which had anticipated a growth rate of 5.3%.
The final quarter of 2023 saw a growth rate of 5.2%, an improvement from the annual 4.9% rate recorded in the three months leading up to September. Nevertheless, quarter-on-quarter growth slowed from 1.3% in the September quarter to 1% in the three months leading up to December.
Premier Li emphasized during his Davos address that the Chinese economy was open for business and highlighted its potential for foreign investment. He called for the removal of barriers to competition and trade worldwide to address global challenges, although he did not mention the ongoing challenges China poses to other countries like Australia.
While the fact that China slightly exceeded its official target of around 5% may raise eyebrows outside of China, the country faced economic weaknesses throughout the year, with falling exports and imports, plummeting property prices, struggling property companies, and widespread deflationary pressures.
Monthly, quarterly, and full-year figures from the National Bureau of Statistics indicated slight improvements in industrial production and investment compared to the previous months and quarters. However, retail sales showed a notable decline.
China's retail sales in December 2023 increased by 7.4% year-on-year, missing market consensus for an 8.0% rise and slowing from November's 10.1% increase. While it marked the 12th consecutive month of growth in retail trade, the latest figure was the softest since September.
In contrast, China's industrial production in December 2023 grew by 6.8% year-on-year, surpassing market forecasts of 6.6%. This marked the fastest pace of expansion in industrial production since February 2022, mainly due to increased mining (4.7% vs. 3.9% in November) and manufacturing (7.1% vs. 6.7%).
China's fixed-asset investment also showed improvement, rising by 3.0% year-on-year over the year ending in December. This was slightly higher than market estimates and November's 2.9% increase, with December recording a tiny 0.09% rise compared to November.
