Government’s target for 2022 missed: China’s economy is only growing by three percent

China’s economy grew by a total of 3 percent last year – far below the official target of the Chinese government. It’s one of the weakest results in decades.

It’s more than analysts were expecting after a year of strict Covid restrictions and lockdowns in megacities that have weighed heavily on the economy. And yet it is far below the official target of the Chinese state and party leadership, which set itself the goal of growth of 5.5 percent in the spring. Now it’s three percent. That’s one of the weakest results in decades. Growth was only slightly weaker in the first Corona year 2020.

The world’s second-largest economy faced several problems last year: The weakening global economy led to less demand for Chinese goods. Due to China’s strict zero-Covid policy and lockdowns in cities with over a million inhabitants, important industrial centers such as Shanghai, Guangzhou, Tianjin and Shenzhen were shut down for weeks and months. Domestic consumption declined.

Slump in the large real estate sector

The figures published by the National Statistics Office also show particularly clearly how badly the real estate sector in China collapsed last year – which was otherwise a major driver of the Chinese economy. Accordingly, more than a third fewer new construction projects were started in 2022 than in the previous year. Investors and buyers are cautious, many real estate companies in China are highly indebted.

For the new year, the National Bureau of Statistics expects the Chinese economy to recover after moving away from the zero-Covid policy. International experts and analysts are also optimistic that China’s economic growth will recover to four to five percent this year after the current wave of corona infections has leveled off.