China's economy grew at its second-lowest rate since the 1970s last year due to Covid restrictions, but better-than-expected data from the fourth quarter and December raise hopes that it may be on the verge of recovery.
The National Bureau of Statistics reported on Tuesday that the world's second-largest economy's gross domestic product expanded by 3% in 2022, exceeding the median estimate of 2.7% provided by economists in a Bloomberg survey. In the beginning, the government had set a growth target of "around 5.5%," but Covid lockdowns and the sudden lifting of restrictions in December made that GDP target impossible to achieve.
The economy expanded by 2.9% over the previous year in the final quarter of 2022. December's activity was weak, but not as bad as economists had anticipated.
For the majority of 2022, China adhered to its COVID Zero policy, which adversely affected production throughout the nation, from the financial center of Shanghai to the technology hub of Shenzhen to the iPhone city of Zhengzhou to the base for car manufacturing in Jilin. Infections increased as a result of the policy's rapid elimination in December, but activity has since resumed in areas where cases have peaked, such as Beijing, the capital.
As consumer spending rises and the housing slump eases, economists are now betting on a stronger recovery in the coming months. In a Bloomberg survey of economists, the median estimate is for growth to accelerate to 4.8 percent this year.