China’s economy grew 3% in 2022, the second-slowest growth rate since the last year of Mao Zedong’s Cultural Revolution in 1976, with the last quarter of the year seeing declining growth as the country dealt with a sweeping COVID-19 surge.
This was the slowest growth since the 2.2% increase during a pandemic-hit 2020, although the economy had rebounded to register 8.4% growth in the following year.
The GDP in 2022 reached 121.02 trillion Yuan ($17.84 trillion), the National Bureau of Statistics (NBS) said on January 17, up from 114.92 trillion Yuan in 2021 (or $17.78 trillion as per the then exchange rate).
The past year, however, has seen China’s “zero-Covid” policy, which was discontinued in early December, extract heavy economic tolls. The economy grew by only 0.4% in the second quarter, which saw a harsh lockdown of Shanghai, the financial capital, and other cities. Growth fell to 2.9% in the last quarter of the year down from 3.9% in the previous three months.
Since the easing of “zero-Covid” on December 7, China has reported millions of cases as well as more than 60,000 deaths. In December, retail sales, which the government has been banking on to drive growth amid a continued decline in the property sector, the other key growth driver, was down by 1.8% year-on-year. Investment in real estate was down by 10% last year.
Kang Yi, head of the NBS, said the “economy continued to develop despite downward pressure” and in the coming year the government would “make economic stability its top priority and pursue progress while ensuring stability this year”.
The first quarter of 2023 is, however, expected to remain challenging as the COVID-19 wave continues to peak in many cities around China and economic activity sees a usual lull during the annual Chinese New Year holiday in end-January, when much of the labour force returns home.
Economists do, however, expect growth to rebound in 2023 with the end of lockdowns and mass quarantine, and with China finally opening up after three years of isolation from the world.