Recovery is on the rise, and many foreign banks are optimistic about the Chinese economy
Experts from multiple foreign-funded financial institutions have stated that the main expected goals of the Chinese economy were successfully achieved last year, and they believe that with the increased effectiveness of policies, the Chinese economy is expected to continue to consolidate and rebound.
According to data released by the National Bureau of Statistics of China on the 17th, China's gross domestic product (GDP) exceeded 126 trillion yuan in 2023, a year-on-year increase of 5.2%. China's economic growth rate ranks among the top among major economies in the world, and China remains the largest engine of global economic growth.
"Since August last year, the overall economic data of most months has been better than expected." Zhu Haibin, chief economist of JPMorgan Chase in China, said, "From the rate cut by the People's Bank of China in August last year, the reserve ratio cut in September, to the announcement of an additional 1 trillion yuan of treasury bond in October, we see that the policy has become more active and targeted in stabilizing growth."
UBS Asia Economic Research Director and Chief China Economist Wang Tao stated that in the fourth quarter of last year, the year-on-year growth rate of total retail sales of consumer goods, exports, infrastructure investment, manufacturing investment, and industrial production all increased, with GDP growth slightly exceeding expectations.
Nomura China's Chief Economist, Lu Ting, noticed that the added value of China's large-scale industries increased by 6.8% year-on-year and 0.52% month on month in December last year, which was better than expected. Especially, the production of mobile phones and cars increased by 29.6% and 24.5% year-on-year, providing strong support for the steady recovery of industrial production data.
In terms of exports, amidst the slowdown in global trade and investment, China's exports denominated in RMB have achieved a slight increase in 2023, especially with impressive performance in the new three categories of electric passenger vehicles, lithium-ion batteries, and solar cells. "The competitiveness of China's manufacturing industry in the global market is constantly increasing. In 2023, the total export of 'new three types' products exceeded the trillion yuan mark for the first time, providing new impetus for economic growth," said Xiong Yi, Chief China Economist at Deutsche Bank.
Looking ahead to 2024, several foreign financial institutions have expressed that favorable conditions supporting the high-quality development of the Chinese economy are constantly accumulating, and the trend of economic recovery towards a positive state will continue to be consolidated.
Zhu Haibin stated that consumption will continue to be the main driving force for China's economic growth in 2024. The household savings rate is expected to further decrease to pre pandemic levels, which will contribute 1 percentage point to actual consumption growth.
Liu Jia, Director of Asian Investment Strategy at Deutsche Bank's Private Banking Division, believes that in some key industries in China, especially those related to high-tech, employment has shown some degree of recovery, so it is expected to continue to drive consumer confidence recovery in 2024.
Ding Shuang, Chief Economist of Standard Chartered Bank Greater China and North Asia, stated that with the combined effect of industrial profit growth and fiscal support, China's manufacturing and infrastructure investment is expected to remain relatively stable in 2024.
Liu Jing, Chief Economist of HSBC Global Research Greater China, stated that the US China interest rate spread is expected to narrow in 2024, which will provide more space for China's monetary policy.