In a recent report, China’s economy was shown to have grown more than initially estimated in 2023, reaching a total economic activity of 129.4 trillion yuan ($17.7 trillion). This increase did not affect the forecast for about 5% growth in GDP for the year. Despite challenges from the COVID-19 pandemic and a housing market downturn, the government has stepped up measures to counter the slowdown, focusing on boosting consumer spending and business investment. The World Bank acknowledged these efforts, raising its growth forecast for China to 4.9% for this year and 4.5% for next year, although growth is expected to slow in the following years due to weaknesses in the property sector.
The World Bank highlighted the importance of addressing widening inequality and improving the social safety net in China to provide a stronger economic foundation for its population, particularly for the low-income group and the vulnerable middle class. The ongoing trade tensions with the U.S., including the risk of higher tariffs on Chinese exports, could pose additional threats to the Chinese economy, as the country heavily relies on exports for growth. Despite efforts to boost demand through various measures, the World Bank believes that further action is needed to restore growth to higher levels and mitigate the impact of external challenges on China’s economy.
The economic census conducted once every five years provided a clearer picture of China’s economic activity during a period of significant disruptions caused by the pandemic. The government’s commitment to stepping up spending and issuing more bonds to support local governments affected by the property crisis reflects a proactive approach to addressing economic challenges. While the exact impact of the revised GDP estimate on China’s annual economic growth in 2023 was not specified, officials stated that further details would be released later, indicating ongoing monitoring and evaluation of the economic situation.
The size of the U.S. economy in 2023 was noted to be $27.36 trillion, highlighting the significant economic influence of both China and the United States on the global economy. Despite the challenges posed by the pandemic and the housing market downturn, China’s economy showed resilience in 2023, growing at a 5.2% annual pace according to the revised estimate. With the World Bank raising its growth forecasts for China in the near term, the focus remains on sustaining growth momentum and addressing structural issues such as inequality to ensure a more stable and inclusive economic environment for the country’s population.
