China’s gross domestic product grew by 5.5 percent year on year in the first half of 2023, indicating a “good momentum of recovery” in the national economy, according to the National Bureau of Statistics (NBS) on Monday.
“Market demand has gradually recovered, production supply continued to increase, employment and price were generally stable, and residents’ income grew steadily,” said Fu Linghui, spokesperson for the NBS.
While China’s second-quarter GDP growth of 6.3 percent was the highest since the second quarter of 2021, it fell short of market expectations due to a low-base effect last year, which was a period that was heavily impacted by COVID-19.
“Although the economy’s marginal improvement and stable recovery remained unchanged, the external environment had become more complex and challenging, and the foundation for sustained domestic economic recovery is yet to solidify,” Bruce Pang, chief economist and head of research at JLL Greater China, told CGTN.
Industrial production rose 3.8 percent year on year while the fixed-asset investment increased at the same rate.
This year, China’s economy has faced internal and external pressures. Its growth challenges have become more pronounced when comparing second-quarter growth with the first three months of 2023.
However, the 0.8 percent quarter-on-quarter GDP growth for the second quarter surpassed expectations.
China has set an annual economic growth target of around 5 percent, and the World Bank last month raised its Chinese economy expectations to 5.6 percent for the year, a 1.3-percent increase from the January projection.
In terms of its inflation, China’s annual consumer price index (CPI) remained flat in June, a data point that garnered widespread attention.
Fu reiterated that deflation was not occurring in China and that the low CPI growth rate was temporary.
In the first half of the year, the total retail sales of social consumer goods saw a jump of 8.2 percent year on year. Additionally, the contribution rate of final consumption expenditure growth to economic growth reached 77.2 percent, significantly higher than the previous year.
The International Monetary Fund (IMF) expects China to contribute to approximately one-third of global growth in 2023. The number of global executives from companies such as Apple, Tesla, and Starbucks, who have visited China in search of business opportunities so far this year has also indicated global confidence in the Chinese market.
Looking ahead, Pang highlighted the importance of strengthening China’s economic fundamentals, emphasizing the role of consumption and investment. He said China needs to continue to promote consumption to drive the consolidation and expansion of its economic recovery.