Confirming Premier Li’s earlier leak, China’s economy grew at 5.2% YoY – comfortably and miraculously beating the all-knowing official target of ‘around 5%’ (which is the lowest target in decades), as industrial production and investment climbed in the final stretch of the year.
However, thew GDP print at +5.2% was weaker than the +5.3% consensus estimate.
While GDP accelerated, other indicators were mixed in the final month of 2023:
- Industrial output rose 6.8% in December from a year ago, better than a 6.6% increase projected by economists
- Retail sales grew 7.4%, weaker/worse than the forecast for an 8% gain
- Fixed-asset investment climbed 3% in the year, slightly better than a predicted 2.9% rise
- The urban jobless rate was 5.1% last month, up/worse from 5% in November
“China’s economy withstood external pressures and overcame domestic challenges to rebound and improve in 2023,” the NBS said in a statement accompanying the data.
The agency warned, though, that economic development “still faces some difficulties and challenges.”
China released its jobless rate among young people (which it decided to stop issuing once it hit a record high above 20%) – but in the wonderfully Chinese way, the new series (at 14.9%) is entirely incomparable as it ‘excludes students’.
A bigger problem for liquidity-hypers was that Li explicitly pointed out that China’s growth rate last year – a rise from the figure of 3% in 2022 when the country was hit by its arcane Zero-COVID policies – was achieved without resorting to “massive stimulus” and the economy was making “steady progress”.
“We did not seek short-term growth while accumulating long-term risks, rather we focused on strengthening the internal drivers,” he said.
“Just as a healthy person often has a strong immune system, the Chinese economy can handle ups and downs in its performance. The overall trend of long-term growth will not change.”
The biggest threat to the economy remains the housing sector and China’s property crisis is not getting any better at all as the number of cities seeing home price increases continues to collapse…
Finally, China’s population shrank faster last year, falling by 2 million people.
The 9 million births was the lowest total since at least the start of the People’s Republic of China in 1949, and 11 million people died.
That number was probably boosted by the COVID pandemic, but there’s no detail in today’s data about cause of death.
And that’s a big problem – because you can’t print people… and dependents are soaring.