China's economy steadily advances, providing momentum for the world

Editor's note: The article is written by Zhang Xiaoxi, an associate research fellow at the Institute of Economics, Chinese Academy of Social Sciences, Deputy Director of the Economic Growth Research Office. The article reflects the author's opinions and not necessarily the views of CGTN.

In 2023, China's economy grew by 5.2 percent, moving closer to its potential growth rate. As the opening year for fully implementing the spirit of the 20th National Congress of the Communist Party of China, despite facing downward pressure from a complex international environment and multiple overlapping domestic factors, the Chinese government sought progress while maintaining stability, focusing on expanding domestic demand and driving high-quality development. China's economy witnessed a spiral recovery in 2023, with an annual growth rate considerably higher than the 3 percent of the previous year and the 4.5 percent average growth rate over the three pandemic years. The economy has sustained a positive growth trend.

Domestic demand emerged as the primary driver of economic growth, effectively offsetting the pressure from contracting external demand. In 2023, net exports of goods and services contributed -0.6 percent to China's economic growth, with the share of external demand in the economic structure continuously declining, according to the data released by the National Bureau of Statistics (NBS) on Thursday. 

Domestic demand contributed 111.4 percent to economic growth, reaching the highest level in the past five years. Compensatory household consumption was evident, with total retail sales of social consumer goods exceeding 47 trillion yuan (over $6.5 trillion), setting a historical record and growing by 7.2 percent year-on-year. Consumption reclaimed its position as the chief driving force of economic growth. Final consumption expenditure fueled GDP growth by 4.3 percent, contributing 82.5 percent to economic growth. Stimulated by continuous improvement in manufacturing profitability, investment in the manufacturing sector provided support for the total fixed asset investment, with manufacturing investment growing by 6.5 percent year-on-year.

The industrial transformation and upgrading picked up speed, the factors stabilizing employment were accumulated, and high-quality development steadily advanced. The NBS data also indicates that by industries, the primary industry grew by 4.1 percent compared to the last year, the secondary industry rose by 4.7 percent, and the tertiary industry saw a 5.8 percent growth. The industrial sector exhibited recovery and improvement, with a reinforced innovation system in manufacturing. The value-added of industries above the designated size increased by 4.6 percent, and that of the equipment manufacturing industry grew by 6.8 percent. 

Exports of the "new three items" (new energy vehicles, lithium batteries, and photovoltaic products) experienced rapid growth. The service industry played a more prominent role in driving economic growth, with its value-added accounting for 54.6 percent of GDP, 1.2 percent more than the previous year. Economic growth continued to generate more job opportunities, improving the overall employment situation for groups such as migrant workers, youth, and those facing employment difficulties. China's average surveyed urban unemployment rate stood at 5.2 percent, dropping 0.4 percent from last year.

Against the backdrop of sluggish global economic growth, China's economy has provided sustained energy for the recovery of the world economy, becoming a key engine propelling growth. With a 5.2 percent economic growth rate, China surpasses the estimated global rate of around 3 percent, maintaining a leading position among major economies globally, acclaimed by Kang Yi, director of the NBS. In terms of contributing to the world economic increments, China's contribution exceeds 30 percent, far surpassing India and the United States, which are ranked second and third, he added. And according to statistics from the International Monetary Fund, every 1 percent increase in China's economy will raise the production levels of other economies by an average of 0.3 percent.