China Economic Quarterly Q3 2022
China’s GDP increased by 3.9% in Q3 and 3% in the first three quarters. Economic recovery remains under pressure amid COVID-19 control policies in Q4.
This issue provides an overview of the macroeconomic trends in Q3 2022, some policy updates and hot topic analysis.
Highlights
Here are some macro-economic highlights:
- Total GDP reached 87 trillion yuan with 3% growth
- Total fixed asset investment reached 42 trillion yuan, a 5.9% increase
- Total real estate investment reduced by 8% to 10 trillion yuan
- PMI rebounded to above 50.1% in September
- Industrial added values grew 3.9% in in the first three quarters
- Total retail sales of consumer goods decreased by 0.7% to 32 trillion yuan
- Imports and exports increased by 9.9% to 31 trillion yuan
- PPI dropped to 0.9% and CPI went up 2.8% in September
Policy updates
Growth of aggregate financing to the real economy increased by 10.6% in the first three quarters
According to the People’s Bank of China (PBoC), in order to support economic growth, it is essential to stabilise the growth of total credit, reduce financing costs for enterprises, and provide strong support to key sectors and industries affected by COVID-19. The total aggregate financing to the real economy (AFRE) increased by 27.77 tn yuan in the first three quarters, 3.01 tn yuan more than the same period last year.
Fiscal revenue decreased by 6.6% while fiscal spending grew by 6.2%
In the first three quarters, fiscal revenue dropped by 6.6% YoY to 15.32 tn yuan, as a result of slower growth caused by renewed COVID-19 outbreaks, according to the Ministry of Finance. Excluding value-added tax credit refunds, fiscal revenue grew by 4.1%. Meanwhile, the national public budget expenditure increased by 6.2% to 19.04 tn yuan.
Hot topic analysis: What does the 20th National Congress of the CPC mean for China’s economy?
The 20th National Congress of the Communist Party of China (CPC) took place in Beijing from 16 to 22 October. During which, the party’s top leaders were elected and major issues settled. The Congress stressed that building a well-rounded modern socialist country is a great and arduous undertaking. Xi Jinping, the re-elected general secretary for the 20th Central Committee of the CPC, and chairman of the Central Military Commission said, ‘we'll be steadfast in deepening reform and opening up across the board, and in pursuing high-quality development’, while also highlighting that a prosperous China will create many more opportunities for the world. Just as China cannot develop in isolation from the world, the world needs China for its development.
Implications and opportunities
- Development is still the top priority and GDP per capita will reach the level of moderately developed countries by 2035.
- China will continue to build a high-standard socialist market economy, create a new development pattern and pursue high-quality development:
- By building a high-standard socialist market economy, state-owned enterprises, as well as private and foreign-owned enterprises will continue to thrive in China.
- In terms of fostering a new pattern of development, some industries are now innovation-driven, while consumption plays a fundamental role in economic growth.
- In a bid to pursue high-quality development, China has made dramatic progress in areas such as urbanisation, high-tech manufacturing, and transportation.
- Outstanding achievements in the development of the transportation sector pave the way for high quality development.
- China will prioritise science and technology, education, talent, and green development:
- Science and technology are one of the vital strategic pillars for China to transform its economy into an innovation-driven one.
- The green development contains four major aspects, such as transition to a model of green development, pollution prevention and control, sustainability in the ecosystems, and peak carbon emissions and carbon neutrality.
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