China’s Q4 growth slows to 2.9% y/y, beats expectations

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People look on near cranes standing at a construction site in Beijing

BEIJING (Reuters) – China’s economy hit a bump in the fourth quarter, growing by 2.9% year-on-year, National Bureau of Statistics data showed on Tuesday, beating expectations but still underlining the toll exacted by a stringent “zero-COVID” policy.

Gross domestic product (GDP) had been forecast to expand 1.8% from a year earlier, according to a Reuters poll of analysts, slowing from 3.9% in the third quarter.

Growth for 2022 was at 3.0%, the data showed, far below the official target of around 5.5%. Excluding the 2.2% expansion after COVID first hit in 2020, this is the worst showing in nearly half a century.

On a quarter-on-quarter basis, GDP came in at 0.0% in October-December, compared with expectations for a 0.8% drop and a 3.9% gain in the previous quarter.

China’s economy struggled over 2022, with major industrial centres including Shanghai and the Yangtze River Delta area as well as Guangzhou locked down or put under curbs for long periods as part of the government’s “zero-COVID” strategy.

That stringent anti-virus policy was abruptly lifted last month, and economists expect growth to rebound this year although rocketing COVID infections could temper the revival in the near term. Beijing has pledged more support for the economy as external demand falters amid global recession risks.

(Reporting by Kevin Yao, Joe Cash and Ellen Zhang; Editing by Shri Navaratnam)

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