Prime Minister Li tells Davos that China’s economy will grow by about 5.2% in 2023

Hong Kong
CNN
—

Premier Li Qiang said Tuesday at the World Economic Forum’s annual meeting in Davos, Switzerland, that China’s economic growth rate in 2023 was about 5.2%, slightly above the official target set by the Chinese government.

“Over the past year in 2023, China’s economy has generally recovered and improved,” the country’s second-highest official said at a meeting with world business and political leaders.

The Chinese government has so far indicated a growth rate of around 5% in 2023, and is scheduled to release last year’s annual GDP statistics on Wednesday.

The expansion would mark a significant recovery from 2022, when China’s economy grew just 3%, but it still ranks among the worst economic growth rates in more than 30 years.

Excluding the pandemic, China’s growth was hampered by strict lockdowns and other restrictions, and the country’s annual growth rate of 5.2% was 3.9% until 2022, when the economy expanded by 3.9% due to international sanctions after the 1989 Tiananmen Square massacre. This is the slowest pace since 1990.

The country is beset by a series of economic problems, including a real estate crisis, record youth unemployment, deflation and a rapidly aging population. International economists widely expect China’s growth rate to slow to about 4.5% this year.

These problems have caused investors to rush for an exit. China’s stock market became the biggest loser in 2023. The country’s blue-chip CSI300 index fell more than 11%, and Hong Kong’s Hang Seng index fell 14%. Meanwhile, the MSCI World Index ended the year up 22%, its biggest annual gain since 2019.

“Even if there are ups and downs in China’s economic management, the overall long-term positive trend remains the same,” Li said. He will be the most senior Chinese leader to attend Davos in person since President Xi Jinping in 2017.

Mr. Li also sought to reassure foreign investors wary of China’s difficult business environment and slowing growth.

“Investing in the Chinese market is not like that.” be “It’s a risk, but it’s an opportunity,” he said.

The country has about 400 million middle-income people, and that number is expected to double to 800 million over the next 10 years, Lee said.

“Consumption momentum…is very strong,” he added.

Ongoing urbanization will create huge demand Fields such as housing, education, and medical care Care for the elderly remains important, he said, adding that there are still nearly 300 million rural Chinese who will eventually migrate to urban areas.

He pointed out that there is also significant scope for investment in improving urban transport and communications infrastructure.

Li also promised to build a “first-class” operating environment for international business in China.

“No matter how the world situation changes, China will continue to adhere to its basic national policy of opening up, and its doors will continue to expand,” he said.

His remarks came as the Chinese government steps up efforts to revitalize the economy and attract foreign investment back into the country. Foreign companies are becoming increasingly wary of increased surveillance by the Chinese government and are withdrawing from China. Foreign direct investment (FDI) in China turned negative for the first time since 1998 in the third quarter.

Mr. Li met with Swiss President Viola Amherd on Monday and said the two countries would begin talks to deepen economic ties and upgrade their free trade agreement, China’s Ministry of Foreign Affairs said in a statement.

In November, President Xi visited the United States for the first time in more than six years and met with President Joe Biden in an effort to repair bilateral relations. In a meeting with the heads of American companies, President Xi pledged to make it easier for foreigners to invest and operate businesses in his country.