• • Economic stimulus measures and a low base from the previous year supported China's economy to grow by 5.2% in 2023, surpassing the official target of 5.0%. However, the real estate sector remains a drag on China's economic growth.

    • In 2024, Kasikorn Research Center predicts that China's economy is likely to slow down to 4.5%, with ongoing risks in the real estate sector and an increased risk of entering a deflationary period.

China's economy grew by <\/span><\/strong>5.2% YoY in 2023, exceeding the official target.<\/span><\/strong>

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  • In the fourth quarter of 2023, China's economy grew by <\/span><\/strong>5.2% YoY, up from <\/span><\/strong>4.9% YoY in the third quarter of 2023, driven by domestic spending. Retail sales in China for Q4 2023 grew by 8.3% YoY, recovering from -2.7% YoY in Q3 2023. Additionally, the Chinese government approved the issuance of government bonds worth 1 trillion yuan (equivalent to 0.8% of China's economy in 2023) to stimulate the economy through infrastructure improvements.<\/span>
  • For 2024, China's economy is expected to grow by 5.2%, supported by a low base from the previous year, including a 5.8% growth in the service sector. Moreover, investment in fixed assets increased by 3.0%, primarily driven by investments in technology-related industries, aligning with the Chinese government's goal of self-reliance in technology. However, investment in real estate decreased by 9.6%, indicating that the real estate sector continues to hinder China's growth.<\/span>

In 2024, China's economy is likely to slow down from the previous year, with a forecast of 4.5%.<\/span>

Ongoing issues in the real estate sector will continue to pressure China's economy. In 2024, defaults by property development companies are expected to persist. Recently, China has implemented policies to support both property developers and relaxed regulations to facilitate home purchases. However, the real estate sector has yet to show signs of recovery, with unfinished and undelivered homes remaining a significant issue. Sales of new homes from 100 property developers in 2024 are projected to decline by 16.5%.<\/span>

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  • The risk of deflation is increasing. In Q4 2023, China's inflation turned negative for three consecutive months, raising concerns about domestic deflation. However, the negative inflation was primarily due to oversupply issues in the pork market. In 2024, inflation is expected to remain low due to unemployment issues and the real estate sector, with a projected inflation rate of 1.4% (Bloomberg consensus).<\/span>
  • In 2023, China's economy is expected to slow down to 4.5%. The Chinese government is likely to continue easing monetary and fiscal policies to support the economy during this transition. Watch for the announcement of China's economic targets for 2024 during the government meeting in March 2024.<\/span>