City skyline in China

China Economic Forecast

China Economic Outlook

After negative economic data across the board in July, August data hints at an incipient stabilization in activity. In the month, readings for industrial production, retail sales, credit provision, exports and imports were all better than markets were expecting. That said, the economy continues to be held back by a slumping property sector, tepid sentiment among firms and consumers, soft external demand, deteriorating demographics and U.S. trade and tech restrictions. Stimulus has been stepped up in recent weeks: At end-August, the government cut mortgage rates and down payments, and in mid-September the Central Bank cut reserve requirements. Together with previously announced policy easing, these measures should shore up the economy in the months ahead. Further cuts to the Central Bank’s policy rates and targeted support for the property sector are on the cards ahead.

China Inflation

Consumer inflation clocked 0.1% in August, contrasting July’s 0.3% year-on-year drop in prices but slightly below market expectations. Producer prices fell 3.0% on an annual basis in August, a softer decrease than July’s 4.4%. Price pressures should increase from current levels through end-2023 on the recent rise in global energy prices and the depreciation of the yuan.

This chart displays Economic Growth (GDP, annual variation in %) for China from 2013 to 2022.

China Economic Data

2018 2019 2020 2021 2022
Population (million) 1,405 1,410 1,412 1,413 1,413
GDP (USD bn) 13,896 14,277 14,689 17,816 17,977
GDP per capita (USD) 9,888 10,125 10,402 12,612 12,726
GDP (CNY bn) 91,928 98,652 101,357 114,924 121,021
Economic Growth (Nominal GDP, ann. var. %) 10.5 7.3 2.7 13.4 5.3
Economic Growth (GDP, ann. var. %) 6.7 6.0 2.2 8.4 3.0
Private Consumption (ann. var. %) 8.3 6.4 -2.5 13.1 -
Nominal Fixed Investment (ann. var. %) 5.9 5.4 2.9 4.9 5.1
Industrial Production (ann. var. %) 6.2 5.7 2.8 9.6 3.6
Retail Sales (ann. var. %) 9.0 8.0 -3.9 12.5 -0.2
Disposable Income (ann. var. %) 7.8 7.9 3.5 8.2 3.9
Wages (ann. var. %) 10.9 9.8 7.6 9.7 6.7
Unemployment (% of active population, eop) 4.9 5.2 5.2 5.1 5.5
Fiscal Balance (% of GDP) -4.1 -4.9 -6.2 -3.8 -4.7
Public Debt (% of GDP) 56.7 60.4 70.1 71.8 77.1
Money (ann. var. of M2 %) 8.1 8.7 10.1 9.0 11.8
Inflation (CPI, ann. var. %, eop) 1.9 4.5 0.2 1.5 1.8
Inflation (CPI, ann. var. %, aop) 2.1 2.9 2.5 0.9 2.0
Inflation (PPI, ann. var. %, eop) 0.9 -0.5 -0.4 10.3 -0.7
Inflation (PPI, ann. var. %, aop) 3.5 -0.3 -1.8 8.1 4.2
1-Year Loan Prime Rate (%, eop) 4.31 4.15 3.85 3.80 3.65
7-Day Reverse Repo Rate (%, eop) 2.55 2.50 2.20 2.20 2.00
1-Year Deposit Rate (%, eop) 1.50 1.50 1.50 1.50 1.50
10-Year Bond Yield (%, eop) 3.23 3.14 3.14 2.78 2.84
Exchange Rate (CNY per USD, eop) 6.88 6.96 6.53 6.35 6.90
Exchange Rate (CNY per USD, aop) 6.62 6.91 6.90 6.45 6.73
Current Account Balance (USD bn) 24.1 102.9 248.8 352.9 401.9
Current Account Balance (% of GDP) 0.2 0.7 1.7 2.0 2.2
Merchandise Trade Balance (USD bn) 351 421 524 670 851
Merchandise Exports (USD bn) 2,487 2,499 2,590 3,357 3,561
Merchandise Imports (USD bn) 2,136 2,078 2,066 2,687 2,709
Merchandise Exports (ann. var. %) 9.9 0.5 3.6 29.6 6.1
Merchandise Imports (ann. var. %) 15.8 -2.7 -0.6 30.0 0.8
Foreign Direct Investment (USD bn) 138 141 149 181 189
International Reserves (USD bn) 3,168 3,223 3,357 3,427 3,307
International Reserves (months of imports) 17.8 18.6 19.5 15.3 14.6
External Debt (USD bn) 1,983 2,071 2,401 2,747 2,453
External Debt (% of GDP) 14.3 14.5 16.3 15.4 13.6

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