GDP grows by 4.5 percent in the first quarter
China ended its zero-COVID policy at the end of last year, during which the economic strength of China declined. According to the Beijing Statistics Bureau, GDP grew by 4.5 percent from January to March 2023 compared to the same period last year. This marks the strongest quarterly growth in a year.
High consumption as an economic driver
Since the relaxation of COVID policies, the Chinese population has been engaging in more travel and shopping activities. According to the statistics bureau, the economic growth is attributed to the increasing consumer spending and exports. The figures from China for the first quarter are solid and align with the growth target of around five percent for this year, stated analyst Matt Simpson from financial provider City Index in an article by the Süddeutsche Zeitung. The rise in GDP is also lifting sentiment in Asia to some extent.
According to the statistics bureau, in March 2023, a two-year high in retail sales is achieved in China with a growth of 10.6 percent. In contrast, the growth of industrial production stands at 3.9 percent.
Strong economic growth expected to quickly weaken
According to the Organisation for Economic Co-operation and Development (OECD), China is expected to achieve a growth rate of 5.3 percent this year. Next year, the situation is projected to remain fairly stable with a growth rate of 4.9 percent, but it is anticipated to slow down in the following years. One of the reasons for this is attributed to geopolitical shifts.