China has revised its gross domestic product (GDP) growth for 2023 upward, reflecting the resilience of its economy amid various challenges. The National Bureau of Statistics announced on Thursday, during the release of the fifth national economic census, the GDP figure is now pegged at 129.4 trillion yuan (approximately $17.73 trillion), up from previous estimates of 126.06 trillion yuan.
Kang Yi, the head of the bureau, stated, "China's economy has withstood the test of multiple internal and external risks over the past five years, and maintained a stable trend." This revision suggests the economy has grown by 3.4 trillion yuan, which corresponds to about 2.7% additional growth. Notably, this census is conducted every five years and is instrumental for policy-making, particularly as China prepares its 15th five-year plan for 2026 to 2030.
The announcement followed within the same week when the World Bank unveiled its revised GDP growth forecast for China, projecting growth at 4.9% for 2023, slightly increasing from its previous forecast of 4.8%. Despite the optimistic revision, the World Bank cautions about persistent challenges such as subdued household and business confidence and pressures from the struggling property sector.
Lin Tao, deputy head of the National Bureau of Statistics, emphasized during the press conference, “The revision of 2023 GDP would not have a significant impact on China's 2024 GDP growth rate.” He alluded to the broader economic environment where weak domestic demand and real estate issues dampen growth prospects.
China’s economy has experienced notable growth over the years, but recent developments have raised concerns about its sustainability. The most recent census reported increased activity, particularly within the secondary and tertiary industries; the number of business entities rose by 52.7% compared to 2018. Employment, on the other hand, showed more muted growth with industries such as real estate facing significant contractions.
Data indicated employment within the property sector has decreased significantly, by approximately 27% from 2018 to 2023. The challenges posed by the real estate slump are expected to linger, prompting officials to implement stimulus measures for boosting short-term domestic demand. The government plans to issue special treasury bonds amounting to 3 trillion yuan to spur genuine economic activity.
Looking forward, the economic census should help formulate strategies for President Xi Jinping’s vision of doubling the economy by 2035 from its 2020 levels. Chinese leaders have committed to increasing the budget deficit and loosening monetary policies to combat anticipated trade tensions, particularly with the newly elected U.S. administration set to take office next year.
This revision of the 2023 GDP is also reflective of the broader efforts and strategies China is undertaking to navigate its complex economic environment, which has been significantly influenced by the COVID-19 pandemic. The impacts of the past few years, both internally and externally, have shaped the current economic strategies being adopted as the government aims for sustainable growth.
President Xi has presented the necessary measures to rekindle economic dynamism through structural reforms aimed at increasing household consumption, echoing sentiments from the World Bank which suggested, "China should re-boost economic growth through structural reforms." This highlights the urgency for China to improve consumer confidence and stimulate demand amid challenging economic conditions.
While the overall revisions and projections showcase progress, it is clear the path moving forward will not be free of obstacles. Analysts predict persistent uncertainties due to global economic trends and internal market conditions, emphasizing the need for strategic maneuvers to address the underlying issues affecting growth.
With the economy facing strong headwinds from multiple fronts, the revised GDP figures offer both hope and caution—the figures indicate resilience, yet they also reveal the vulnerabilities inherent within the current economic architecture. It's a reminder of the delicate balance China must maintain as it strives for sustained growth and stability on the global stage.
