PWC – China Economic Quarterly, 3Q 2023

During the first three quarters of 2023, China's GDP grew by 5.2% year-on-year to reach 91.3 trillion yuan. In the third quarter, the GDP increased by 4.9% year-on-year and 1.3% quarterly. The International Monetary Fund (IMF) has raised its forecast for China's GDP growth in 2023 from 5% to 5.4%, and for 2024 from 4.2% to 4.6%, thanks to the stronger-than-expected growth and recent policy announcements. Although the GDP growth rate was higher in the second quarter (6.3%) compared to the third quarter (4.9%), the recovery rate of China's economy improved slightly on a quarterly basis in the third quarter due to the high comparative bases from the previous year. The policies implemented in the first three quarters of 2023 have led to a continued recovery of the Chinese economy by stimulating domestic demand and boosting consumer confidence. However, there are still challenges to address, including a complex external environment, a sluggish real estate market, inadequate domestic demand, and relatively weak investments. The government aims to achieve a 5% economic growth target, and it is likely that this target will be met. However, last year's low GDP growth figure of 3% has negatively affected market sentiment, despite recent improvements. The employment situation in the third quarter of 2023 improved, with the urban unemployment rate decreasing by 0.3 percentage points compared to the same period last year. By the end of September, 32.97 million people had been lifted out of poverty. China's economy is facing challenges and struggling to move forward, and market sentiment remains subdued despite policy-driven improvements. The external environment, including conflicts in Ukraine and the Middle East and persisting inflationary trends in developed economies, poses ongoing challenges that may impact the Chinese economy in 2024. However, if China's GDP growth is maintained around 5.5% in 2024, it is expected that social problems such as the youth employment rate will greatly improve.