Published: Apr 19, 2023
China’s GDP grew 4.5 percent year-on-year in the first quarter (Q1) of 2023, higher than the 4 percent previously forecast by many international analysts. Many foreign media used phrases and words like “beyond expectation” and “optimism” to describe China’s economic growth rate in Q1. “As the economic recovery gains traction, investment banks and international organizations have upgraded China’s growth forecasts for this year,” reported CNN. This good start has laid a solid foundation for China’s economy in 2023 and injected more confidence into the global economy.
In the latest Q1 economic data, the strong growth in several areas has received particular attention. In the manufacturing sector, investment rose 7 percent year-on-year, while exports climbed 8.4 percent, showing strong growth. As the “barometer for consumption,” retail sales jumped 10.6 percent in March, significantly exceeding previous expectations of 7.4 percent growth. The number also exceeded the growth rate in January and February, showing an overall upturn. In addition, there were also many signs of stabilization and rebound in the real estate sector.
Previously, considering that economic activities at the beginning of the year were still somewhat dragged down by factors such as the COVID-19 epidemic, many people were cautious about the performance of the Chinese economy in Q1. However, the Chinese economy’s strong resilience and internal dynamics proved to burst forth with great energy again this spring. In this sense, China’s Q1 GDP growth rate was beyond expectations, but also within our expectations.
Overall, production demand stabilized and rebounded in Q1; employment rate and consumer prices were generally stable; personal income continued to increase; and market expectations improved significantly. This data outline the development trends shown in the general picture of China’s economy, giving the market a greater sense of optimism about the Chinese economy in 2023. The scenes that we see in life, such as the long queues in front of some restaurants, tourists walking shoulder-to-shoulder in some attractions, and the busy production in factories, vividly show that China’s economic and social life is rapidly recovering. They corroborate the data released by China’s National Bureau of Statistics.
Also recently, the 133rd China Import and Export Fair, also known as the Canton Fair, resumed all offline activities for the first time in three years since the start of the pandemic. This event is also the largest one in history. As the bellwether of foreign trade, this year’s Canton Fair attracted more than 34,000 buyers and exhibitors from 226 countries and regions. The world’s top 500 companies and top 250 retailers also attend the event, and the delegation of some enterprises consists of even more than 200 people. Many foreign investors have expressed optimism about the future of China’s economy during the exhibition. The busy scene where “thousands of businessmen gather up” is a true reflection of the world’s confidence in China.
It is important to emphasize that China’s economic performance in Q1 results from the concerted efforts of the entire Chinese society. The potential of China’s economic development cannot automatically become a realistic achievement, and the difficulties in front of us will not disappear automatically if we don’t overcome them. Chinese people never expect to reap without sowing. We see that the Central Committee of the Communist Party of China and the State Council have made top-down decisions to activate the economy; local governments have launched specific initiatives based on their conditions to focus on the economy and improve the business environment; and enterprises have seized the opportunity to develop despite difficulties. The confidence and enthusiasm of Chinese society have run high after the three-year pandemic.
The more the hardships, the greater the Chinese people’s resolution. The indomitable Chinese economy has recovered this spring as the earth awakens, and people are convinced that a brighter and warmer future lies ahead of us. In particular, resources and potentials are not overdrawn by the efforts made for the Q1 economy. We made it without flooding China’s economy with liquidity, but at a steady pace and with strong resilience. This pushes back against some Western public opinion’s pessimistic rhetoric and shows an undeniable basic fact: Even five years into the US-launched trade war against China, three years into the pandemic, and over a year into the Russia-Ukraine conflict, China still firmly holds the initiative of its economic development. Under highly uncertain external conditions, China’s economy has still presented great results in maintaining growth and transforming and upgrading the Chinese economy. It has also brought new vitality and certainty to the global economy.
As China’s May Day holidays approach, the tourism market is already heating up. In the first spring after the epidemic, people are getting out of their homes more, and liveliness is back on the streets. We believe, however, that this is just the beginning. As international travel gradually resumes, China and other parts of the world will intertwine with each other more closely, and the heat of the Chinese economy will bring more warmth to the world economy, which has just survived the cold winter.
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