China’s economy grew by about 5.2% in 2023, slightly better than the official target Beijing had set, Premier Li Qiang said Tuesday at the World Economic Forum’s annual meeting in Davos, Switzerland.
“In the past year of 2023, China’s economy has generally rebounded and improved,” the country’s second highest official told the meeting of global business and political leaders.
The Chinese government had earlier said that it was targeting a growth rate of around 5% for 2023, and is set to announce its annual GDP figures for last year on Wednesday.
While this expansion would mark a significant pick-up over 2022, when China’s economy grew by just 3%, it is still one of the country’s economic worst performances in over three decades.
Barring the pandemic years through 2022, when China’s growth was disrupted by strict lockdowns and other restrictions, 5.2% is the country’s slowest pace of annual growth since 1990, when the economy expanded by 3.9% because of international sanctions following the 1989 Tiananmen Square massacre.
The country has been beset by a series of economic problems, including a real estate crisis, record youth unemployment, deflation, and a rapidly ageing population. International economists have widely projected China’s growth to slow to around 4.5% this year.
Those problems have sent investors rushing for the exits. China’s stock markets were the biggest losers in 2023. The country’s blue-chip CSI 300 index fell more than 11%, while Hong Kong’s Hang Seng was down 14%. Meanwhile, the MSCI World index closed the year 22% higher, its biggest annual jump since 2019.
“Even if there are twists and turns in China’s economic operation, its overall long-term positive trend will not change,” said Li. The premier is the most senior Chinese leader to attend the Davos forum in person since President Xi Jinping in 2017.
Li also tried to reassure international investors, who have become increasingly wary of China’s tough business environment and slowing growth.
“Investing in the Chinese market is not a risk but an opportunity,” he said.
The country has about 400 million people in the middle-income group, and that number is expected to double to 800 million in the next 10 years, Li said.
“The momentum for consumption … is very strong,” he added.
Ongoing urbanization will create huge demand in sectors such as housing, education, medical and elderly care, he said, adding that there are still nearly 300 million rural Chinese who will eventually migrate to cities.
There is also a lot of room for investments in upgrading urban transportation and telecommunications infrastructure, he noted.
Li also pledged to create “first-class” operating environment for international businesses in China.
“No matter how the world’s situation changes, China will adhere to its fundamental national policy of opening up, and its door will only get wider and wider,” he said.
His remarks come as Beijing intensifies its efforts to revive the economy and woo foreign investment back into the country. Foreign companies have grown wary of Beijing’s rising scrutiny and are pulling out. In the third quarter, a measure of foreign direct investment (FDI) into China turned negative for the first time since 1998.
On Monday, Li met with Swiss President Viola Amherd and said the two countries would deepen economic ties and start talks to upgrade their free-trade agreement, according to a statement by the Chinese foreign ministry.
In November, Xi visited the United States for the first time in more than six years, where he met with President Joe Biden to amend ties between the two countries. In a meeting with top American business executives, Xi pledged to make it easier for foreigners to invest and operate in his country.
CNN’s Robert North contributed to reporting.
