Editorial | Vibrant private sector can put China back on path to growth
- Falling economic and population numbers at a time when country re-emerges from Covid-19 call for healthy moves to restore investors’ confidence
Not that long ago, when China’s economic growth defied gravity and the population headed towards 1.5 billion, 3 per cent annual growth coupled with population decline within a decade seemed incredible.
The reality, amid a hardline Covid policy that held fourth-quarter growth to 2.9 per cent, is that last year’s figure, the second lowest in 46 years, is close to expectations.
Three per cent is well short of Premier Li Keqiang’s initial target of “around 5.5 per cent”. That will trigger a lot of discussion, especially in tandem with news that the population actually fell for the first time in 60 years, which along with ageing has serious implications for growth strategies.
When such numbers are released together they drive market sentiment. As a result, there is bound to be a negative view about China’s economic prospects. But it is premature to draw any firm conclusions about an economy that is still maturing.
02:14
Chinese reluctant to have children as China reports first population fall in 61 years
The immediate future hinges on whether Covid can be brought under control after Lunar New Year, or the holiday triggers another wave of infection.
Despite the heavy price in case numbers and deaths China paid for suddenly opening up last month, this year can mark a resurgence of economic growth.