China reported Tuesday that the country’s GDP increased three per cent in 2022, missing the official target of 5.5 per cent set in March 2022. China’s GDP grew 8.1 per cent in 2021, rebounding after a dismal 2020 that saw GDP growth expand a mere 2.2 per cent. China faces a slew of economic challengesin 2023, including the rampant (and recent) spread of COVID-19, sluggish export numbers, a wobbly property market, and worrying population decline.
Slow and steady
There are signs of hope: in December 2022, unemployment in China stood at 5.5 per cent, an improvement compared to November’s rate of 5.7 per cent. The World Bank is also forecasting a 4.3 per cent increase in GDP growth in 2023. A spokesperson for China’s foreign ministry told reporters on Wednesday that “in 2022, despite the recurring and lingering pandemic and sluggish global economic growth, China . . . coordinated [its] COVID-19 response with socioeconomic development, stepped up macro regulation, and effectively handled the impact of factors beyond expectation.”
Speaking at the World Economic Forum's annual meeting in Davos on Tuesday, China's Vice-Premier Liu He assured attendees that “the door to China will only open up further,” and that foreign investment — after three years of uncertainty over zero-COVID curbs — is welcome.
More money, more problems
While prompting some economic gains, China’s abrupt dismantling of its zero-COVID policy has also triggered unrest. On Tuesday, the New York Timesreported that some pandemic-control workers, long enforcers of a seemingly permanent policy, were now demanding better wages or new jobs altogether. Protests in Chongqing and Hangzhou saw workers clash with police. As COVID-19 testing, and the zero-COVID apparatus at large, goes by the wayside, the government is scrambling to cope. One report cited by the Timessuggests that “mass testing in large cities accounted for about 1.3 per cent of China’s economic output.”