By the middle of 2022, China’s top leadership had stopped mentioning their target for GDP growth. It was already clear that they’d fall short of the 5.5 per cent figure set at the beginning of that year, with the Politburo instead saying that they strove for “the best possible results”. In the end, a series of fierce nationwide lockdowns combined with the global impact of the Russian invasion meant that the economy grew by a measly 3 per cent in the year. The bottom had fallen out of China’s miraculous growth machine.
So when newly released figures from this week showed that the Chinese economy grew by 4.5 per cent in the first quarter of 2023, Beijing and its usual defenders were jubilant. March retail sales were up 10.6 per cent compared to the previous March, while exports were up nearly 15 per cent. New home prices rose at the fastest pace in 21 months. After the annus horribilis of 2022, China is on track to hit its GDP growth target in 2023 (5 per cent). The Q1 rebound has exceeded expectations. The Global Times, that ever-gracious tabloid, called it a “slap in the face” for western media.
But the reality is not so rosy, as much as these figures should be welcomed. China’s growth is not only good news for its people, who have suffered through an economic nightmare in the zero Covid years, but for the rest of the world as we face the very real possibility of a global recession. Rishi Sunak and most western leaders would kill for any growth at all. But in truth, the Chinese rebound is just a post-Covid bounce. The long-term outlook for the country’s economy – and its living standards – is perhaps the most grim it has been since the economy first opened up.
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