The elites of Davos like the Chinese power dream of it: forget 2022, its confinements, its boats which remain at the dock, its factories which, at best, are idling, its closed shopping centers and its deserted airports, to better bounce back and so that China will again be, in 2023, one of the main drivers of global growth.
The statistics published on Tuesday January 17 prove that the path will be difficult. In 2022, China’s gross domestic product (GDP) grew by only 3%. The worst figure since 1976, with the exception of 2020 (2.24%), marked by the paralysis of the country in the first quarter. Far, above all, from the objective announced in March 2022, which was “about 5.5%”. After growth – over one year – of 4.8% in the first quarter, 0.4% in the second, 3.9% in the third, China ends with an increase in activity – still over one year – of 2.9% in the fourth quarter.
In 2022, Chinese growth was therefore in tune with the global economy. For the first time in decades, it therefore did not play its role as a locomotive. On the contrary, other emerging countries have fared much better. It is even more the rest of the world that has driven China, with exports up by 10.5%, while imports have not only increased by 4.3%. Result: foreign trade posted a record surplus of 5,863 billion yuan, or more than 800 billion euros (compared to 597 billion euros in 2021). Whatever one may say, the decoupling of economies is far from obvious.
Urban unemployment on the rise
On the other hand, cloistered at home because of the zero Covid policy, the Chinese consumer has remained frugal. Retail sales of consumer goods even fell by 0.2% over the year. If, overall, investment increased by 5%, it is essentially due to (public) investment in infrastructure (+9.4%) and manufacturing (+9.1%). As expected, real estate collapsed (−10%), sales of commercial space even plunged by 24%.
Another logical consequence of this low consumption: urban unemployment fell from 5.1% in December 2021 to 5.5% in December 2022 (for young people aged 16 to 24, it increased by 14.3% at 16.7%). For its part, inflation remained under control, with a 2% increase in consumer prices.
In 2022, the cost of expenses related to the zero Covid strategy has been phenomenal. The province of Guangdong alone (126 million inhabitants, or a little less than a tenth of the Chinese population) evaluates its own at 146.8 billion yuan in three years: 30.3 billion yuan in 2020, 45.4 billion in 2021 and 71.1 billion in 2022. An exponential increase which says a lot about the infernal machine that the zero Covid policy had become for public spending, and which largely explains the abandonment of the latter, on 7 December 2022. Especially since consisting mainly of tests and police measures to isolate neighborhoods, even cities, these expenses cannot seriously be qualified as investments.
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