China: economy in the first half of 2023

The dust has already subsided after the economical responses to the Chinese economy in the second 4th of this year and the full first half of 2023.

They are worth looking at from a distance of a fewer weeks, especially with data from another regions of the world.

China's GDP in Q2 2023 increased by 6.3% y/y (in Q1 by 4.5%). The average of the first half of this year is an increase of 5.3%. That is, in the assumed "forks" 5~5.5% r/r.

In the last 5 years, China's GDP grew at least in 2020 (+2.2%) and in 2022 (+3.0% y/y). This, of course, had to do with the Covid-19 epidemic.

China's industrial production increased by 3.8% in the first half of the year. During the same period, the value of services increased by 6.4% y/y, consumption by 8.4% y/y, investments by 3.8% y/y and abroad trade by 2.1% y/y.

Real property investments are increasing very slow and are inactive smaller than last year (-7.9% y/y).

Foreign trade loses its momentum, although it continues to grow.

The tiny and medium-sized enterprises sector inactive cannot recover the vigor from the Covid-19 epidemic.

Unlike all the world's top economies China is not threatened by inflation, but by its opposite, or deflation. maker prices are constantly decreasing and so the profitability of industrial production is decreasing.

Unemployment among young people is inactive at an alarmingly advanced level (21.7%).

In the first half of this year, the Industrial Activity Index (PMI) fell below the 50 point limit, meaning stagnation in this sector. In July, the PMI of China was 49,3 points.

Data of the State Statistical Office (国家统计局)

A clear point in this image is an increase in disposable household income. On average, in the first half of this year, it was RMB 19672 (about PLN 10987) per head. This means an increase of 6.5% y/y.

In cities, the income was 26357 RMB (approx. 14371 PLN), an increase of 5.4%, and in the village of 10551 RMB (approx. 5893 PLN), an increase of 7.8% y/y.

For comparison: the disposable income of a household in Poland at the beginning of 2023 was PLN 2250.

China's economical situation in the first half of 2023 is ambiguous. Macroeconomic policy is effective, the economy reflects and improves. But on a micro scale, especially in the MIA sector, there are many problems that have not been resolved for a long time.

Their solution is not the global political and economical situation – complex and inactive complicated.

Internal as well as external request (and possibly especially external demand) is inactive showing mediocre dynamics. Housing and business investments show signs of weakness.

Increasing geopolitical tensions can lead to fragmentation of planet trade and thus have a negative impact on the economy. On the another hand, an increase in expenditure and investment can be expected with expanding real income and decreasing uncertainty.

The next six months will require further stimulation and government support, especially for small, average and private companies.

The glass is half full but half empty.

Source:

http://www.stats.gov.cn/

Author: 梁安基 Andrzej Z. Liang, 上海 Shanghai, 中国 China

Email: [email protected]

Editorial: Leszek B.

Email: [email protected]

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