China's GDP grew by less than half that of India in 2022
China’s economy grew by 3 per cent compared to India’s 7 per cent because of Xi Jinping's zero-Covid policy and the decline in global demand. India relies more on domestic consumption. China is aiming for recovery this year, but a super boom will be hard to achieve. US companies operating in the Chinese market are pessimistic.
Beijing (AsiaNews) – Last year China’s GDP grew by 3 per cent, the country’s National Bureau of Statistics reports, less than half of India's, which is projected to grow by 7 per cent. The Chinese government's target for 2022 was 5.5 per cent.
Indian experts told Nikkei Asia that China's slow growth was due to its stringent anti-Covid restrictions, which were lifted only in December 2022, and its reliance on exports at a time when world demand was down because of the Russo-Ukrainian war and high energy costs.
By contrast, India has performed better because it is less integrated in the global economy and relies more on domestic demand.
Since the outbreak of the COVID-19 pandemic three years ago, and with the intensification of the trade and technology war with the United States, Chinese President Xi Jinping has focused on boosting domestic demand, but with mixed results so far.
In real terms, per capita spending in China fell by 0.2 per cent after growing by 12.6 per cent in 2021. The baseline was very low though, given the peak of COVID-19 the year before.
This is only the third decline since 1980, when the authorities began publishing such data. Retail sales, the measure of domestic consumption, also contracted by 0.2 per cent, the second-worst performance since 1968.
Even more significant is the collapse of urban jobs, the first time since 1962, just after the famine caused by the Great Leap Forward, the disastrous economic policy carried out by Mao Zedong from 1958 to 1961.
In total, China lost 8.4 million jobs in cities last year, down to 459.3 million.
In addition to Xi's draconian zero-Covid policy, the workforce shrank also because of an aging population and fewer migrant workers moving from the countryside to the cities.
With health restrictions lifted, growth is expected to accelerate, but for many analysts it will not be a super boom, as some observers forecast at the start of the year.
After 19 months of decline, sales of new homes are up in February, while manufacturing and the service sector also grew last month.
However, a survey by the American Chamber of Commerce in China shows that US companies in the country are more pessimistic about their prospects.
The study found that for the first time in 25 years, US companies no longer consider China among the top three investment priorities.
Most fear geopolitical tensions between Washington and Beijing, not to mention an even more closed and regulated local market as a result of efforts to centralise power in the hands of Xi and the Communist Party of China.
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