China's fourth-quarter GDP (gross domestic product) missed the market estimates. However, the Asian nation still reached its government's official target.
Although China wasn't able to match the GDP estimates of market analysts, its GPD rate during the last three months in 2023 was still higher compared to its record in 2022.
In 2022, the Chinese economy grew by only around 3% because of the prolonged COVID-19 regulations as the government implemented its zero-COVID policy. After that, China was able to bounce back a bit; reaching over 5% in the fourth quarter of 2023.
According to CNBC's latest report, China's GDP increased by 5.2%, which didn't match the forecast of market analysts, which is 5.3%. But, the difference is less than 1%.
"With investment in the property sector falling, the economy is more dependent on the manufacturing sector and service sector," said Pinpoint Asset Management's Chief Economist Zhiwei Zhang.
"This transition will take time to be accomplished. The key question in the market is when the transition in the property sector will finish," he added.
Kang Yi, the head of China's National Bureau of Statistics, said that the GDP expansion had been "hard won."
However, he still warned that the Chinese economy faced insufficient demand and a complex external environment moving into 2024, as reported by Al Jazeera.
These include the efforts of numerous Western nations to lessen dependence on China, intensifying geopolitical tensions with the U.S., and plummeting supply chain diversity.
As of writing, China hasn't released its official GDP growth target. But, the government is expected to release it as early as March.
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Aside from the mentioned internal and external problems above, the youth unemployment rate in China could also be affecting its GDP growth.
Market experts explained that based on Okun's Law of Economics, a slight increase in unemployment could greatly lead to a decrease in the GDP rate (sometimes, the unemployment rate increase doubles the GDP rate decrease).
In the summer of 2023, the NBS temporarily halted the release of China's youth unemployment rate. Officials said that calculations should be re-assessed before releasing the data.
Now, China finally released its unemployment rate for young people, especially those between 16 to 24 years old. NBS confirmed that the youth unemployment rate in 2023 was 14.9%.
In December, the youth unemployment rate in cities reached over 5%. Market analysts said that the youth unemployment rate mirrors China's weakening economy.
