Economic Indicators and China's GDP, FDI, and Trade Trends

The main hindrance to China’s economic growth in 2022 was the stringent COVID-19 restrictions, which led to overall GDP growth slowing to 3 percent. The removal of these restrictions, therefore, removes the single largest obstacle to growth, and industry and society alike will benefit in the coming year as a result.

According to economic statistics released by the National Bureau of Statistics (NBS) for the period from January to February 2023, China’s economy has begun to recover since the lifting of zero-COVID restrictions in late 2022.

China has set a GDP growth target of “around 5 percent” for 2023, a goal that has been deemed as being relatively modest and achievable. The IMF has projected China’s GDP to grow 5.2 percent in 2023. Certain areas of the economy, such as manufacturing and industry, are already experiencing a strong rebound and will help to stimulate overall growth.

In January and February 2023, retail sales of consumer goods reached RMB 7.7 trillion (approx. US$1.1 trillion), a year-on-year increase of 3.5 percent. This is up from a decrease of 1.8 percent year-on-year in December 2022. 

Investment in high-tech industries increased by 15.1 percent year-on-year, of which investment in high-tech manufacturing and high-tech services increased by 16.2 percent and 12.3 percent year-on-year, respectively.

Foreign investment inflows into China at the beginning of 2023 are off to a good start. In January, actual use of foreign capital amounted to RMB 127.7 billion, a year-on-year increase of 14.5 percent (in dollar terms, the amount reached US$19.02 billion, up 10 percent year-on-year).

This is a marked acceleration from the 6.3 percent year-on-year growth in December and is especially strong given the relatively high rate of growth recorded in January 2022 of 11.6 percent year-on-year. (Due to the very high level of growth in FDI inflows recorded in February 2022 – 37.9 percent – expect to see a slower growth rate in February 2023.) 

The industries with the high growth in the actual use of foreign capital included: 

• Manufacturing (40 percent year-on-year); 
• High-tech (62.8 percent year-on-year); 
• High-tech manufacturing (74.5 percent year-on-year); and  
• High-tech services (59.6 percent year-on-year).

According to the State Council of People’s Republic of China, foreign direct investment (FDI) in the Chinese mainland, expanded 6.3 percent year on year to 1.23 trillion yuan in 2022. In U.S. dollar terms, the FDI inflow went up 8 percent year on year to 189.13 billion U.S. dollars.

The manufacturing industry saw FDI inflow increase by 46.1 percent year on year to 323.7 billion yuan in 2022, while that of hi-tech industries jumped by 28.3 percent compared with 2021, data from the ministry showed.

Investment from the Republic of Korea, Germany, and Britain, climbed by 64.2 percent, 52.9 percent, and 40.7 percent, respectively -- while that from the European Union registered a sharp rise of 92.2 percent year on year.

FDI flowing into the country's central region reported a year-on-year expansion of 21.9 percent, followed by 14.1 percent in the western region.

For comparison, in 2021, China’s actual use of FDI hit RMB 1.149 trillion. In US dollar terms, the FDI inflows came in at US$173.48 billion according to the Ministry of Commerce (MOFCOM).

As to the number of foreign-invested enterprises (FIEs), about 38,497 were registered in 2022.

China's annual foreign trade value topped 40 trillion yuan (about 5.94 trillion U.S. dollars) for the first time in 2022, as the country works to better coordinate epidemic response with economic and social development amid complex and severe domestic and international situations.

Exports rose 10.5 percent to 23.97 trillion yuan and imports went up 4.3 percent to 18.1 trillion yuan in 2022.

China’s trade surplus surged to USD 51.12 billion in April 2022, up from USD 40.89 billion in the same month a year earlier, topping market forecasts of USD 50.65 billion. It was the largest trade surplus since January, as exports rose while imports were unmoved. Export increased by 3.9 percent YoY; the first single-digit growth in the last year and a half and the slowest increase in nearly two years; while imports were flat, in the midst of ongoing COVID-19 curbs in important regional hubs.

Total goods trade reached a record 42.07 trillion yuan, up 7.7 percent year on year, topping the world for six consecutive years, according to the General Administration of Customs (GAC).

Foreign trade by private firms in 2022 jumped 12.9 percent to account for 50.9 percent of the total, crossing the 50 percent mark for the first time.

China's vast export market and competitive edge in manufacturing also contributed to the trade growth. The country takes up 14.7 percent of the global export market, leading the world for 14 consecutive years.

The country's imports and exports with ASEAN, the European Union, and the United States gained 15 percent, 5.6 percent, and 3.7 percent, respectively. Trade with Belt and Road countries climbed 19.4 percent to account for 32.9 percent of its total foreign trade, while trade with other members of the Regional Comprehensive Economic Partnership rose 7.5 percent.

China saw over 60 percent export hikes in green products, including solar batteries, lithium-ion batteries, and electric vehicles.