China | Economic outlook of 2024 and the 5.2% conclusion of 2023

Summary

2023 GDP growth concluded at 5.2%, in line with expectation and higher than 3% in 2022. We provide growth and policy outlook of China in 2024.

Key points

• Key points:
• The 2022-2023 two-year average GDP growth dipped to 4.1%, significantly off the previous track of “higher-than-6%” before the pandemic time back to 2019.
• China’s 2023 Q4 GDP and economic activities are also better-than-expected amid the recent policy support. The year-on-year growth rate of Q4 reached 5.2% y/y, higher than 4.9% y/y in Q3 2023.
• The recent economic bottomed-out are mostly supported by consumption (particularly service sector recovery), industrial production underpinned by policy priority of high-end manufacturing and green transformation, infrastructure investment backed by the extra RMB 1 trillion government bond issuance as well as the exports resilience.
• However, look ahead towards 2024, the ongoing recovery has not got a solid foundation yet as the deep adjustment of real estate market and local government debt overhang still remain the main risks and the weak sentiments have not been completely reversed.
• Monetary and fiscal policy remain expansionary in 2024 to support growth recovery and to rebuild market sentiments.

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