Premier Li China's 5.2% GDP growth in 2023 sans massive stimulus

22 Jan, 2024

Chinese Premier Li Qiang announced in Davos, Switzerland, that China's economy exceeded expectations by achieving approximately 5.2% growth in 2023, surpassing the initially set target of "around 5%.

Notably, this accomplishment was realized without resorting to "massive stimulus," as emphasized by Li during his address at the World Economic Forum.In his first appearance as China's No. 2 official at Davos, Premier Li highlighted the nation's commitment to sustainable economic development, avoiding short-term gains that may lead to long-term risks.

This proactive approach aims to instill confidence in the global audience, signaling China's resilience and responsible economic policies.Li's preemptive disclosure of specific growth figures ahead of the official announcement reflects his intention to set a confident tone for the international community. Despite this positive news, the NASDAQ Golden Dragon China Index saw a 3.8% decline, reflecting market reactions, particularly affecting companies like Nio Inc. and Baidu Inc.

As China contemplates 2023's success, concerns about maintaining momentum persist in the face of deflationary pressures and a prolonged property slump. Premier Li assured foreign executives of China's commitment to addressing challenges, including improving the business environment, shortening the "negative list" for foreign investment, and ensuring fair treatment for foreign companies.The Chinese government is considering a special sovereign bond plan, injecting 1 trillion yuan ($139 billion) into the economy to support growth. Li's charm offensive continued at a luncheon with multinational company heads, reassuring them of China's openness to investment and willingness to resolve challenges faced by foreign enterprises.

Despite efforts to stabilize ties with the U.S., challenges remain, such as the election in Taiwan impacting relations. President Xi Jinping seeks a delicate balance between economic revival and national security amid ongoing military and trade tensions. China's commitment to policy improvements, as indicated by Li and Xi, reflects a strategic effort to enhance the country's global economic standing and foster foreign investment.

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