Hello, this is Jill Disis in Hong Kong.
China seemingly notched a win for its economic goals this week when it reported that GDP growth last year hit 5.2% — bang on its official target of “around 5%” set last March.
Authorities were so confident that Premier Li Qiang revealed the number during a speech to the world’s elite in Davos, Switzerland, a day before China’s statistics department did. It’s the first time I have seen that kind of front-running for such a critical piece of economic data.
So why are investors — and economists — so dour?
While that headline figure looks passable, you don’t have to dig too deeply to see where the trouble spots are for the world’s second-largest economy.
China has recorded its worst deflationary streak since the Asian Financial Crisis, with a measure of economy-wide prices falling for a third straight quarter to close out 2023.
The rout in the property sector also shows no signs of letting up, with real estate investment and housing new starts both plunging last year. Manufacturing for EVs and solar panels is booming, but those sectors are nowhere near big enough to replace housing as a growth driver.
Even the GDP figure is a subject for debate, given longstanding suspicions about the accuracy of those numbers. The research provider Rhodium Group thinks growth last year was likely around 1.5%.
