Foreign-backed banks upbeat on China’s economy

BEIJING: As China revealed data of its economic performance in 2023 recently, experts from multiple foreign-invested financial institutions made positive remarks on the country’s future economic development.

Overall economic data have been better than expected for most months since August, said Zhu Haibin, chief China economist at JP Morgan.

“We have seen that policies have become more active and targeted in stabilizing growth,” Zhu said.

China’s gross domestic product (GDP) grew 5.2 percent year on year to a new high of 126.06 trillion yuan (about $17.74 trillion) last year, the National Bureau of Statistics said.

The growth rate is higher than the government’s annual target of around 5 percent and exceeds the 3-percent increase in 2022.

UBS analyst Wang Tao said that in the fourth quarter of 2023, the yearon-year growth of the key indicators such as retail sales, exports and industrial output all increased, while GDP slightly exceeded expectations.

“The competitiveness of China’s manufacturing industry in the global market continues to increase, and the combined export of new tech-intensive green trio topped the one-trillion-yuan mark for the first time, providing new momentum for economic growth,” said Xiong Yi, chief China economist at Deutsche Bank.

The total export value of China’s new tech-intensive green trio, namely solar batteries, lithiumion batteries and electric vehicles, surged 29.9 percent to 1.06 trillion yuan in 2023.

On the outlook for this year, the economists said that favorable conditions supporting the high-quality development of the Chinese economy have been accumulating, and the good momentum of economic recovery will continue to be consolidated.

Consumption will continue to be the main driver of economic growth in 2024, Zhu said, adding that the household savings rate is expected to drop to pre-Covid levels, which would add 1 percentage point to real consumption growth.

Jason Liu, head of Chief Investment Office Asia Pacific, Deutsche Bank Private Bank, believes that recovery has been seen in employment in key industries, particularly those related to high technology, which is expected to drive the recovery of consumer confidence in 2024.

China’s progress in technological innovation and industrial upgrading is catalyzing a boom in job opportunities in emerging sectors such as smart manufacturing, artificial intelligence and big data, highlighting the country’s burgeoning demand for skilled high-tech professionals.