Abstract: In 2023, China's real GDP growth rate was 5.2%, hitting the annual growth target and surpassing the 2022 figure by 2.2 percentage points. The nominal GDP growth in 2023 was 4.6%, slightly down by 0.2 percentage points compared to 2022, with the GDP deflator at -0.5%.
Looking back at 2023, China's economy recovered, with resilient manufacturing investment, further optimization of export product structures, and accelerated transformation of the service industry. However, post-pandemic 'scars' continued to drag on consumer demand. Compounded by factors such as the unexpected downturn in real estate, regulatory policies on certain industries, and others, endogenous market dynamics remain weak, inflation relatively low, and economic growth potential unfilled, calling for more robust counter-cyclical adjustment policies from the government.
In actual economic operation, the growth of government-led expenditure (2.4%) was lower than that of private sector expenditure (5.1%). The policy rate cuts were less than the decline in inflation, leading to a 2.4 percentage point increase in real interest rates, which creates a misalignment between market expectations and the implementation of macroeconomic policies.
Looking forward to 2024, insufficient demand remains the main challenge for economic operation. To achieve desirable economic growth and inflation target for 2024, a 'double 11' aggregate control policy is needed. Government borrowing should increase by more than 11 trillion yuan. Policy rates should be reduced to lower real interest rates. The PSL tool should be fully utilized to maintain reasonable government investment, and social financing should grow at a rate of no less than 11%.
