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An English-language presser regarding final-year 2023 GDP growth from China’s National Bureau of Statistics (NBS) published today conveys a perhaps surprisingly transparent view of China.
“[China faced a] complex and grave international environment as well as arduous tasks to advance reform, promote development and maintain stability at home,” the NBS wrote.
According to the NBS, however, 2023 was a year not entirely mired in difficulty. The agency offered a range of highlights on Wednesday.
Highlights of China’s 2023, per itself
Reportedly:
- Chinese grain output reached a record high in 2023
- Industrial production recovered (more on that shortly)
- The services sector and consumption grew despite overall deflation in China
- Retail sales increased year-on-year by 7.2 per cent
- Imports and exports were “generally stable”
China’s core inflation rate came in at 0.6 per cent for December, but headline counts have put China in deflation for the last three months.
This could impact the Australian economy which I wrote about in August last year, especially seen now with a view towards much more recent China-borne weakness in iron ore prices.
At the same time, a reported increase in services sector consumption suggests we could see core inflation climb higher. Services is the sector most associated with “sticky” inflation, largely regardless of what country you’re in.
While shelter and housing remain key drivers of inflation in Australia and the US, however, this doesn’t appear to be the case in China – despite the fact China is having its own housing crisis which, at least, rhymes with the same trends causing other countries’.
Industrial production at pre-COVID
The claims about industrial production, by the numbers, are true.
China’s industrial production volumes have returned to pre-COVID levels after four years of volatility, its statistics agency reported on Wednesday.
Industrial production was yo 6.8pc YoY in December 2023, after clocking 6.6pc growth in November of 2023.
All in all, industrial production growth came in at 4.6pc for all of 2023 in China – with the chart below demonstrating this signals a return to pre-COVID levels.
According to the NBS, China’s mining sector was the biggest part of the economy responsible for the return to pre-COVID levels.
Wrapping up the December data pack
The world got a raft of Chinese economic data today, so here’s a rundown of the rest of what we got.
Overall, it looks like China is where it was a month ago – battered, but stable. Analysts have recently commented that China is ‘exporting deflation’ around the world after producer prices in the country recently dropped.
The whole world will be watching the second-largest economy’s progress through 2024, insofar as the country’s data is trusted. Remember that only last year, China stopped reporting youth unemployment as it became too high.
- China reports a YoY growth rate of 5.2 per cent for December 2023
- Reported Q4 GDP YoY growth rate of 1.0 per cent
- Retail sales of 7.4 per cent YoY vs. 8.0 per cent expected for Dec 2023
- Unemployment rate at 5.1 per cent vs. expected 5.0 per cent
