In July, China reported GDP growth of 5.5 percent year-on-year in the first half of 2023. This was one percentage point faster than the first quarter. Total GDP reached RMB 59.3 trillion (approx. US$8.3 trillion). In the second quarter, GDP grew by 6.3 percent year-on-year, up from 4.5 percent year-on-year growth in the first quarter.
Generally, it now looks like China will be lucky to hold 3-4% annual GDP growth for the next three years.
India just reported about 7.3% GDP growth for the first half of 2023. India looks good for 6-7% annual GDP growth.
In mid-August, Barclays cut its forecast for China’s 2023 gross domestic product (GDP) growth to 4.5% from 4.9% because of a faster-than-expected deterioration in the housing market. China’s economic activity data in July, including retail sales, industrial output and investment, failed to match expectations, fueling concern over a deeper, longer-lasting slowdown in growth.
China could still report a 5% GDP growth for 2023 even if the actual GDP growth ends up being 4%.
The latest data raises the risk of China missing its modest 5% growth target for 2023, some economists say.
June and July data were not good.
China’s Economy in H1 2023 – Quick Government Stats
H1 2023 GDP: RMB 59.3 trillion (approx. US$8.3 trillion), +5.5% y/y
Q2 2023 GDP: RMB 30.8 trillion (approx. US$4.29 trillion), +6.8% y/y
Retail sales: RMB 22.76 trillion (approx. US$3.17 trillion), +8.2% y/y
Industry output: +3.8% y/y
Fixed assets investment: RMB 24.3 trillion (approx. US$3.38 trillion), +3.8% y/y
Foreign trade: RMB 20.1 trillion (approx. US$2.8 trillion), +2.1% y/y
National Bank of Australia
The National Bank of Australia has one of the more optimistic views of China’s economy. Here is their recent report.
Weakness in China’s economy that was evident in Q2 has continued into July, with indicators of domestic demand subdued, the real estate sector remaining a headwind and demand for China’s goods in export markets continuing to soften. The highly likely modest cut to the PBoC’s policy rate later this month (having cut its MTF rate in mid-August) is unlikely to provide much of a boost, given already lacklustre loan demand. While our forecasts for China’s growth are unchanged this month – 5.2% for 2023, 4.5% for 2024 and 4.8% for 2025 – risk in the near-term is becoming increasingly weighted to the downside, with a growing chance of China missing its 5% target this year.
China’s industrial production growth slowed marginally in July – increasing by 3.7% yoy (down from 4.4% yoy in June). We are now past the period of significant base effects (related to last year’s COVID-19 lockdowns), and growth in output is relatively weak when compared with pre-pandemic trends.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
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It is the combined complexity of China’s problems that will do it in. Perhaps a super-human artificial intelligence could sort things out for them. But where will they get such a thing? And how do they keep it from seizing control for itself?
I keep relooking at this.
Folks are getting serious about decoupling and, given the cost of labor there, the complete disregard for foreign investor’s funds (as well as the locals) and never mind the negative PR that comes from associating with them nowadays and suddenly recovery doesn’t look promising.
Continuously threatening, bullying, and ripping off all potential customers, suppliers, and investors. Not a great move when you need trade to feed the people and keep the lights on.
The recent property crisis is showing us enormous quantities of useless construction. Useless because it is not functional and useless because, with a drastically declining population, even if it was functional, who is going to live in it (other than flood victims with lots of money)?
The ongoing bombardment of natural disasters isn’t helping of course, as it only serves to point out how badly infrastructure funds have been misspent. The frequent building collapses and natural disasters that lead to the discovery of things like fake drainage systems on massive new constructions is bringing back all the concerns about corrupt builders putting styrofoam and sawdust into the concrete and selling a lot of the cement that should have been there. Really makes one wonder about the Three Gorges Dam stories, too.
And leadership is a disaster, a one-man show ignorant of everything except how to destroy political rivals, real or imagined. There isn’t even anyone to provide competent advice, reliable briefings, or that can be trusted to competently do what they are delegated to do, even if he was getting good information which wouldn’t overwhelm any human being (partly because he has an erratic rep for shooting the messengers).
Also, 70 years old, overweight, and out-of-shape. What happens to the country when the day comes? Everyone anywhere near the bossman’s level who was even remotely competent was replaced with toadying flunkies. How’s that going work out? Anyone who might have replaced him has already been purged. Damned if he dies, damned if he doesn’t.
And yeah, there is no fixing the whole demographic thing. It’s like before a tsunami when all the water in the ocean recedes back over the horizon–it’s too late to stop what’s coming. It’s so depressing a lot of the kids aren’t even going to try to outrun it and no one has the kind of retirement assets needed to support as many elderly as are almost here.
Meanwhile they are missing a couple of hundred million people they had been reporting as existing. The birthrate is in freefall and many schools are shutting down–even as it comes to light that education, quality and quantity both, left something to be desired for the majority of the population, especially the ones that did not go overseas for it. We’ve all heard the expression about getting old before they get rich; it appears there is a corollary dealing with education.
The place’s only real hope for the future lies in creativity and ingenuity, yet is difficult to imagine a government that works harder at stomping these things out, even while paying lip service to them. Which is called hypocrisy. Speaking of which, just ask them about the militia fleet if you want to hear more hypocrisy. Or stealing fish from other country’s waters, no less, or wrecking the South China Sea (that is not in China). Or claiming they are an “Arctic Power” so they can claim its resources.
It’s even beginning to look like, through incredibly (and deliberately) bad reporting, the rate of economic growth may not even have been positive while they were still bragging about it.
I kinda think we need to prepare ourselves for the possibility, just the possibility, of an eighth of the world’s population dragging itself back to the beginnings of the industrial revolution. If it happens it will happen with a lot of pain, tragedy, and thrash.
China growth numbers are as real as its population numbers.
It all depends, doesn’t it, on whether China openly agresses Taiwan. Without that, China’s malaise is really more of a bad headcold than an outright problem. With soft-pedaling the news cycles, and with the inevitable return-of-demand of her markets around the world, her manufacturing base will pick up the slack, and growth will return.
Yet and still there is another large-world problem China faces: bad press from her bad policy internationalism goals. Simply put, the ineradicable record of her human rights violations both within China itself, and her even more egregious minerals-and-resources grabs issues continue to plage their forward motion. Not many countries want to receive products made with African (or any other) slave labor.
Anyway… time will tell. Bıden’s attempts to thwart China’s importing of super-high-tech stuff is kind of a dead end. China can and likely will figure out how to ‘do it’ themselves.
⋅-⋅-⋅ Just saying, ⋅-⋅-⋅
⋅-=≡ GoatGuy ✓ ≡=-⋅
Isn’t the Biden family on the Chinese payroll? Not too surprising Joe is in their pocket.
I am not a Biden cheerleader, by any stretch, but, actually, before the elections, Biden was very concerned that the repressive type of government practiced in China might actually be successful in an economic way, presenting a grim possibility for humankind if other countries decided it was one to emulate. It was one of the top things he was concerned about. And, more recently, cutting off your advanced chips isn’t exactly something you expect from someone on your payroll.
“growth will return” – except that none of the problems identified above are going to disappear. The only relief from the inherent shortcomings of a command economy requires changes in power (& the power structure). Which is usually bloody. And not normally an environment for growth …