China’s economy grew at the second slowest rate in nearly half a century last year, indicating how the country’s strict coronavirus regulations have impacted businesses.
According to official figures, the world’s second largest economy’s GDP will rise by 3% in 2022.
This is significantly lower than the government’s target of 5.5%, but it is higher than most economists predicted.
Beijing abruptly lifted its strict zero-Covid policy last month.
Last year, the policy had a significant impact on the country’s economic activity, but the sudden relaxation of the rules has resulted in an increase in Covid cases, which threatens to drag on growth in the early part of this year.
Except for the start of the pandemic in 2020, when full-year GDP increased by 2.2%, last year’s economic growth was the slowest since 1976, when Chairman Mao Zedong, the founder of the People’s Republic of China, died.
“The results exceeded our expectations. Nonetheless, it reveals the severe economic impact of a zero-Covid policy and a property crash in 2022 on the Chinese economy “According to Jacqueline Rong, deputy China economist at BNP Paribas.
Experts have expressed concern about China’s economic figures, with some warning that the trajectory of the data, rather than the figures themselves, is a good indicator of how the country’s economy is performing.
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Retail sales and factory output in China for December, which were released alongside GDP data, also exceeded expectations but remained weak in comparison to pre-pandemic levels.
“That is not necessarily bad news for the economy. Despite a spike in infections near the end of last year, household consumption appears to have held up well “Vanguard investment firm’s Qian Wang stated.