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China had to announce some difficult numbers on Tuesday. On the one hand, although economic growth in 2022 of just under three percent exceeded the even more pessimistic forecasts of many analysts, it was still well below the official target. In addition, the People’s Republic recorded fewer births than deaths in 2022 for the first time in decades. The latter in particular represents a turning point: China’s population is aging and declining before it reached the prosperity level of industrialized nations. The declining population will therefore create significant political-economic problems for China in the future, as Finn Mayer-Kuckuk explains. Pension funds are at risk, as is general economic momentum.
Meanwhile, a wonky comparison at the start of the week caused a stir in the automotive community. China’s Automobile Manufacturers Association (CAAM) announced excellent car export figures. Chinese media and subsequently we at China.Table drew the conclusion from the data that China had thus outperformed Germany. But there was a hitch to the story: CAAM included commercial vehicles in its statistics for China, as it usually does, but the German statistics do not. This resulted in a distorted comparison. Looking at car exports alone, Germany remains ahead of China for the time being. However, the German industry still has a long way to go before it can rest easy, as Frank Sieren analyzes.
Growth is falling – and the population is declining
Chinese growth in 2022 was well below the original target. It also reached its second-lowest level since the 1970s. But with a plus of three percent, the economy still grew rather respectably, according to official figures issued on Tuesday. Many economists had expected an even weaker result.
Analysts now expect a certain recovery for this year. For instance, experts at the securities firm Nomura believe that steady growth will return in the first quarter once the Covid waves ease and mobility picks up again. But companies should not get their hopes up for an economic boom just yet.
The problems are too severe for that. Exports are weak and the real estate market is far from cleaned up. In addition, car purchase subsidies, which have bolstered sales in recent months, are expiring.