China’s economy last year grew at its slowest pace in four decades as it was hammered by COVID-19 lockdowns and a property crisis, but the forecast-beating reading raised hopes for a robust recovery as it reopens.
Beijing’s rigid adherence to its “zero COVID” strategy of strict containment that effectively shut the country off from the world hammered business activity last year and threw supply chains offline, rattling the global economy.
Economic growth came in at just 3 percent last year, the worst reading since a 1.6 percent contraction in 1976 — when Mao Zedong (毛澤東) died — excluding 2020, when it was hit by the COVID-19 pandemic.
Photo: EPA-EFE
Chinese National Bureau of Statistics official Kang Yi (康義) yesterday told reporters that the world’s No. 2 economy “faced storms and rough waters in the global environment” last year.
“The foundation of domestic economic recovery is not solid, as the international situation is still complicated and severe,” he added.
While the figure missed the government’s 5.5 percent target and was well down from the previous year, it was better than the 2.7 percent predicted in an Agence France-Presse survey of analysts.
The fourth-quarter reading also topped forecasts, providing some optimism for this year.
Meanwhile, retail sales shrank just 1.8 percent last month, compared with an estimated fall of 9 percent, as the lifting of pandemic restrictions spurred consumer spending.
Industrial output and fixed-
asset investment also beat expectations, while unemployment fell last month from November.
“The good news is that there are now signs of stabilization, as policy support doled out towards the end of 2022 is showing up in the relative resilience of infrastructure investment and credit growth,” Oxford Economics Ltd senior economist Louise Loo (盧姿蕙) said in a note.
Beijing abruptly eased COVID-19 restrictions last month in the wake of some of the biggest protests in years, but the move has sent infections soaring across the country, sparking concerns about the near-term effects on the economy.
The World Bank has forecast that Chinese GDP would rebound to 4.3 percent this year — still below expectations.
Jing Liu (劉晶), chief economist for Greater China at HSBC Holdings PLC, said the “normalization path is likely to be bumpy,” warning of a “big setback in the near term” followed by a strong rebound.
“The roll-out of a series of measures to ensure sufficient funding support to developers and revive housing demand will also help to stabilize the property sector,” she said.
China’s economic planning agency yesterday outlined details of measures aimed at boosting the economy, but refrained from major spending initiatives. The piecemeal nature of the plans announced yesterday appeared to disappoint investors who were hoping for bolder moves, and the Shanghai Composite Index gave up a 10 percent initial gain as markets reopened after a weeklong holiday to end 4.59 percent higher, while Hong Kong’s Hang Seng Index dived 9.41 percent. Chinese National Development and Reform Commission Chairman Zheng Shanjie (鄭珊潔) said the government would frontload 100 billion yuan (US$14.2 billion) in spending from the government’s budget for next year in addition
Advanced Micro Devices Inc (AMD) suffered its biggest stock decline in more than a month after the company unveiled new artificial intelligence (AI) chips, but did not provide hoped-for information on customers or financial performance. The stock slid 4 percent to US$164.18 on Thursday, the biggest single-day drop since Sept. 3. Shares of the company remain up 11 percent this year. AMD has emerged as the biggest contender to Nvidia Corp in the lucrative market of AI processors. The company’s latest chips would exceed some capabilities of its rival, AMD chief executive officer Lisa Su (蘇姿丰) said at an event hosted by
AVIATION: Despite production issues in the US, the Taoyuan-based airline expects to receive 24 passenger planes on schedule, while one freight plane is delayed The ongoing strike at Boeing Co has had only a minor impact on China Airlines Ltd (CAL, 中華航空), although the delivery of a new cargo jet might be postponed, CAL chairman Hsieh Su-chien (謝世謙) said on Saturday. The 24 Boeing 787-9 passenger aircraft on order would be delivered on schedule from next year to 2028, while one 777F freight aircraft would be delayed, Hsieh told reporters at a company event. Boeing, which announced a decision on Friday to cut 17,000 jobs — about one-tenth of its workforce — is facing a strike by 33,000 US west coast workers that has halted production
TECH JUGGERNAUT: TSMC shares have more than doubled since ChatGPT’s launch in late 2022, as demand for cutting-edge artificial intelligence chips remains high Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday posted a better-than-expected 39 percent rise in quarterly revenue, assuaging concerns that artificial intelligence (AI) hardware spending is beginning to taper off. The main chipmaker for Nvidia Corp and Apple Inc reported third-quarter sales of NT$759.69 billion (US$23.6 billion), compared with the average analyst projection of NT$748 billion. For last month alone, TSMC reported revenue jumped 39.6 percent year-on-year to NT$251.87 billion. Taiwan’s largest company is to disclose its full third-quarter earnings on Thursday next week and update its outlook. Hsinchu-based TSMC produces the cutting-edge chips needed to train AI. The company now makes more
RSS