china recession

At the annual meeting of the National People’s Congress, China’s rubber-stamp parliament, Premier Li Keqiang announced a 5% GDP expansion target for 2023. This is the lowest in several decades and marginally undercuts the 6%-odd figure that many observers were expecting. More than a strong recovery, it was a modest 3% expansion to 2022 that set the economy up for a statistical spring back. It is possible that Beijing is trying to be conservative and is expecting to under-promise and over-deliver, especially after the big 2022 default, for which growth was projected at 5.5%. Year after year, its growth figures come suspiciously close to official forecasts, but last year was full of shocks for China. A Chinese economy that was already grappling with a real crisis and slowing down has been rattled by zero-Covid lockdowns, supply disruptions and an export slump that was huge on paper. Its latest forecast may be more an exercise in image management than statistical calculations. Through political rhetoric, Beijing has been assuring the people of “general prosperity”. The loss of economic momentum could make that sound even more hollow.