Stay informed with free updates
Just sign up for china economy myFT Digest — delivered straight to your inbox.
China’s population decline in 2023 will accelerate as China’s economic growth rate hits its lowest level in decades, with real estate slump, deflation and demographic pressures likely to continue in the world’s second-largest economy issues have been pointed out.
Gross domestic product (GDP) expanded by 5.2% last year, exceeding the growth rate of just 3% in 2022 when the economy was constrained by the Chinese government’s strict zero-corona restrictions, and already the lowest domestic standard. This exceeded the official target of approximately 5%. Decades.
However, the population decreased for the second year in a row as deaths increased and births decreased. Wang Feng, an expert on Chinese demography at the University of California, Irvine, said the 2 million population decline was due to the coronavirus outbreak that spread through the country in early 2023, after authorities quickly lifted pandemic measures. “The footprint of the infectious disease (Covid-19) is being clarified.”
Analysts said the data underscored the challenge for President Xi Jinping, who began his unprecedented third five-year term last year, to plan a stronger economic recovery.
“In some ways, the headline numbers are a bit misleading,” said Fred Newman, chief Asia economist at HSBC. “The previous year was very weak and actually masked some of the fundamental weaknesses that we see from an aggregate demand perspective.”
Chinese stocks stalled after the data release. Hong Kong’s Hang Seng Mainland Properties index fell 4.9% to a record low, while Hang Seng China Enterprises fell 3.5% this month to fall 9%. The Hang Seng Composite Index fell 3.4%, and the CSI300 index, which includes stocks listed in Shanghai and Shenzhen, fell 1.1%.
A snapshot of the interactive graphic is shown. This is most likely because you are offline or have JavaScript disabled in your browser.
Official figures on Wednesday showed the real estate sector, which has been mired in a debt crisis for three years, will continue to struggle in 2023. Last year’s real estate development investment decreased by 9.6% from the previous year, and new home prices in December fell by 0.4% from the previous month, the largest decline since February 2015.
China’s population will decline to 1.4 billion in 2023 as the death toll exceeds 9 million births, and demographers predict it will decline further as the population ages rapidly. Last year’s death toll was nearly 600,000 more than in 2022, exceeding the increase of more than 200,000 from 2021 to 2022.
“The spike in deaths is very likely due to the chaotic end of the zero-corona virus, which led to many excess deaths,” said Wang, from the University of California.
The population will decline for the first time in 60 years in 2022, a result of policies in the 1980s that limited most couples to one child, well below the average of 2.1 children required to remain flat. . The national death rate in 2023 will be 7.87 per 1,000 people, the highest level since the early 1970s and up from 7.37 the previous year.
A snapshot of the interactive graphic is shown. This is most likely because you are offline or have JavaScript disabled in your browser.
Chinese Premier Li Qiang announced key GDP growth figures at the World Economic Forum in Davos on Tuesday, ahead of official data releases. Mr. Lee praised policymakers for focusing on “strengthening internal momentum” rather than launching large-scale stimulus measures, which some experts have called for to revive growth.
Economists said the annual growth rate probably slowed by as much as 2 percentage points, compared with lower growth during the pandemic, and the Chinese government said this year the Chinese government will take measures to stabilize the real estate market and boost consumption to quell deflationary pressures. He suggested further action was needed.
GDP in the fourth quarter rose 1% from the third quarter and 5.2% from the same period last year, slightly below the 5.3% expected by analysts. The quarter-on-quarter growth rate was slower than the upwardly revised 1.5% in the third quarter.
Julian Evans-Pritchard, head of China economics at Capital Economics, said this was a sign the economy strengthened in the fourth quarter after alternative data sources pointed to a complete contraction in the third quarter. He said it doesn’t seem to match.
“During recessions, official GDP statistics often do not fully reflect the extent of the economic downturn, nor do they indicate the full extent of subsequent economic recovery, making up for it in the future. has been seen in the past,” he said. “So I think something similar is happening at this point.”
Fixed asset investment excluding rural households increased by 3% in 2023 compared to the previous year, infrastructure investment increased by 5.9%, and manufacturing industry increased by 6.5%. According to the National Bureau of Statistics, private investment fell by 0.4%.
A snapshot of the interactive graphic is shown. This is most likely because you are offline or have JavaScript disabled in your browser.
Retail sales, an indicator of consumption, rose 7.4% year-on-year in December (analysts expected an 8% increase), and industrial production rose 6.8% last month compared to the same month a year earlier, exceeding expectations for a 6.6% increase.
Eswar Prasad, a senior fellow at the Brookings Institution think tank, said Chinese leaders said the economy was on the right track and there was “no need for panic stimulus.”
But the data revealed that the economy was experiencing “subdued growth at best, characterized by weak domestic demand and persistent deflationary pressures,” he added. “It seems too early to say that the economy is out of crisis.”
Additional reporting by William Sandland in Hong Kong