Array
China could bounce back from its pandemic reopening swoon both stronger and sooner than expected, offering a rare source of optimism for the U.S. economy amid rising recession fears.
The Chinese economy grew just 3 percent in 2022 and rose at an annual rate of 2.9 percent in the fourth quarter, according to statistics released Monday by Beijing. While that’s sharply down from its 8.1 percent expansion in 2021, both the annual and quarterly growth rates beat expectations and offered hope for a swift 2023 recovery.
China still faces several obstacles as it crawls out of a pandemic-induced slump, including issues within its real estate markets and the country’s ongoing refusal to approve Western COVID-19 vaccines with greater efficacy. The country’s population also shrank last year for the first time since the 1960s, which is bad sign for longer-term economic growth.
But economists are hopeful that a recovering Chinese economy could keep up demand for U.S. products and reduce pressure on supply chains as Americans face a potential recession this year.
“China’s reopening — uneven or not — is well underway and may be a catalyst for supply chain fixes and more global demand,” wrote Jeffrey Buchbinder and Thomas Shipp of LPL Research in a Tuesday analysis.
