According to China’s National Bureau of Statistics, the economy grew by 4.5% year on year in the first quarter of 2023.
While that hardly matches the robust growth of the pre-pandemic period, it did exceed market expectations. And with the right policies, China can do even better.
There is plenty of pessimism about China’s economic prospects nowadays, with many warning — not without reason — that China has entered a deflationary period. In the first quarter of 2023, China’s consumer price index (CPI) rose by only 1.3% year on year — down from 1.8% in the previous quarter. More striking, China’s producer price index (PPI) fell by 2.5% year on year in March — its sixth consecutive month of decline.