COVID-19: China records second slowest economic growth rate in almost 50 years

DHARAMSALA, 17 Jan: Facing the burnt of Beijing’s strict Zero-Covid Policy regulations, China has recorded the second slowest economic growth rate in almost half a century.

With a 3% gross domestic product (GDP) in 2022, the world’s second-largest economy has recorded the second slowest rate in almost half a century – in a sign of how the country’s strict coronavirus regulations have affected businesses, BBC reports.

According to the report, this falls way below China’s target of a 5.5% growth rate “but better than most economists had forecast.”

While China’s authoritarian lockdown to enforce its Zero-Covid Policy was abruptly lifted last month, the report states that “the policy had a major impact on the country’s economic activity last year but the sudden relaxation of the rules has led to a jump in Covid cases that threatens to also drag on growth in the early part of this year.”

“The data came in stronger than our expectation. Nevertheless, it reveals the hard hit to the Chinese economy from a zero-Covid policy and a property rout in 2022,” Jacqueline Rong, deputy China economist from the BNP Paribas bank was quoted as saying in the report.

This is reportedly China’s weakest economic growth since 1976 when the founder of the People’s Republic of China Chairman Mao Zedong died, with an exception of the 2.2% GDP China recorded at the start of the pandemic in 2020. 

Accordion to the report, experts have also voiced caution over China’s economic numbers – with some warning that the trajectory of the data rather than the figures themselves are a useful guide to how the country’s economy is performing.

However, former China Investment Corporation (CIC) executive Dr Qian Wang who now works at the Mutual fund giant Vanguard investment firm opined that it is not bad news for China’s economy.

“That is not bad news for the economy. It almost feels like household consumption held up well in spite of the surge of infections towards the end of last year,” she has said and added, “We are heading into 2023 with stronger momentum… this will pose a lot of upside to economic growth.”

While at it, data released by China’s National Bureau of Statistics on Monday showed that prices of new homes declined for the fifth straight month in December.

Meanwhile, last week, the International Monetary Fund (IMF) managing director Kristalina Georgieva urged Beijing to continue reopening its economy.

“What is most important is for China to stay the course, not to back off from that reopening,” Ms Georgieva has said and added, “If they stay the course, by mid-year or there around, China will turn into a positive contributor to average global growth.”