China 2023 economic growth tipped to be weakest in decades

BEIJING - China's economy likely grew at its weakest annual rate for more than three decades in 2023, data is expected to show on Wednesday, as it was battered by a crippling property crisis, sluggish consumption and global uncertainties.

A group of ten experts interviewed by AFP forecast China's gross domestic product (GDP) to have expanded 5.2 percent, which would represent the lowest rate since 1990, outside of the Covid-19 pandemic.

The reading would be an improvement on the three percent seen in 2022, though that year saw business activity hammered by tight health curbs designed to contain the virus.

After lifting the measures, Beijing set itself a growth target of "around five percent" for 2023.

The return of normal life initially sparked a recovery at the start of last year but the long-awaited rebound soon ran out of steam as a lack of confidence among households and businesses battered consumption.

An intractable real estate crisis, record youth unemployment and a global slowdown are also gumming the gears of the Chinese growth engine.

"The main challenge for China's economic recovery still stems from the property sector," said Jing Liu, chief economist for Greater China at HSBC.

The property sector has long accounted for around a quarter of China's economy.

It experienced dazzling growth for two decades, but financial woes at major firms such as Evergrande and Country Garden are now fuelling buyer mistrust, against a backdrop of unfinished housing developments and falling prices.

Purchasing property has long been seen by many Chinese as a safe haven for parking savings, but the price drop has hit their wallets hard.