This episode covers China’s gross domestic product (GDP) growth rate, producer and consumer prices, import and export data in December and the year 2022; and Guangdong Province’s 2023 GDP target, with comments from Klaus Zenkel, chair of the Chamber’s South China Chapter. From the Chamber side, the January/February 2022 issue of EURObiz on stability is available to download.
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Official 2022 GDP and macroeconomic indicators (in Chinese):
Official December price indices (in Chinese):
Official December foreign trade data (in Chinese):
The January/February 2023 issue of EURObiz:
RUI: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup about the Chinese business landscape.
RUI: On the 17th January, the Chinese National Bureau of Statistics reported that China’s GDP grew by 3 per cent in 2022.
MARIANN: As expected, China missed its growth target of 5.5 per cent set by the Government in March, after strict COVID-related measures caused significant disruptions to its economy. China’s fourth quarter GDP performance, however, beat analysts’ predictions, with China’s economy growing by 2.9 per cent year-on-year.
Additional data released the same day showed that China’s industrial production increased by 3.6 per cent Y-o-Y in 2022, with December’s performance again beating analysists’ projections. Furthermore, retail sales performed better than previous months during the last month of the year, as pandemic-control measures were lifted across the country, with sales falling by just 0.2 per cent year-on-year, far slower than the rate of decrease experienced in the previous months. Urban unemployment clocked in at 5.5 per cent in December, with 16.7 per cent of urban youths being unemployed.
RUI: According to data released by the Chinese National Bureau of Statistics on the 12th of January, Chinese producer prices fell by a slower rate year-on-year in December, when compared to previous month. Consumer prices rose at a faster pace than in the previous month.
MARIANN: The Bureau explained the slower drop in factory gate prices as being a result of prices being compared with a relatively low base from the previous year. On a month-on-month basis, however, producer prices went from a slight increase in November to a 0.5 per cent decrease in December due to the impact of decreased energy and raw material costs. As for the whole year, producer prices edged up by 4.1 per cent in 2022, compared with 2021. Consumer prices went up 1.8 per cent year on year in December, with the rate of increase accelerating slightly from the previous month. Annual inflation was mild, as consumer prices inched up only 2 per cent year-on-year, staying below the government’s target of 3 per cent.
RUI: According to official data released by the General Administration of Customs, in December China registered its steepest fall in exports since it first implemented COVID-control measures in February 2020.
MARIANN: Chinese exports dropped by 9.9 per cent year-on-year in dollar terms, as the country grappled with a surge of COVID-infections after abruptly cancelling its stringent pandemic control measures. Imports declined by 7.5 per cent year-on-year, the second fastest declined experienced during the last two and a half years.
As for the whole of 2022, Chinese exports grew by 7 per cent, while imports increased by 1.1 per cent compared to 2021. China’s largest trading partner during this period was the Association of Southeast Asian Nations, or ASEAN, followed by the European Union and then the United States. Chinese exports to the EU increased by 8.6 per cent while imports from the EU fell 7.9 per cent, in dollar terms, last year.
RUI: China’s manufacturing hub, Guangdong Province, frequently dubbed as the world’s factory, has set its 2023 GDP growth target at 5 per cent.
MARIANN: Commenting on the outlook on doing business in Guangdong in 2023 is Klaus Zenkel, chair of the European Chamber’s South China Chapter:
RUI: At the 20th Party Congress held last October, ‘stability’ was one of the buzzwords that cropped up regularly in key speeches and commentary. However, the uncertainty experienced under zero-COVID, followed by China’s abrupt abandonment of the policy, meant a different reality was experienced on the ground for most people. To make things worse, COVID is just one part of this story: volatile energy prices, China’s weak real estate sector, high local government debt levels and geopolitical tensions mean we stand on shaky ground heading into 2023.
MARIANN: Read the January/February issue of the European Chamber’s bimonthly magazine, EURObiz to learn more about the importance of stability for businesses, as well as other topics such as the new Guangzhou-Nansha tax incentive, regenerative forestry’s role in safeguarding biodiversity, and the European Chamber’s advocacy success in international cargo relay.
RUI: Thanks for listening. Tune in again in February to stay up to date with the Chinese market in the Year of the Rabbit.
MARIANN: In the meantime, find useful links in the episode notes.