China misses fourth-quarter GDP estimates, resumes posting youth

BEIJING — China missed fourth-quarter GDP estimates on Wednesday, while it resumed reporting the unemployment rate for young people.

GDP for the last three months of 2023 rose by 5.2%, according to China’s National Bureau of Statistics. That’s below the 5.3% growth forecast in a Reuters poll.

GDP growth for the full year was also 5.2%, compared with a 3% increase in 2022.

“Macro data from 2023 shows China’s economy is going through a transition to a new growth model,” Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said in a note.

“With investment in the property sector falling, the economy is more dependent on the manufacturing sector and service sector,” he said. “This transition will take time to be accomplished. The key question in the market is when the transition in the property sector will finish.”

Property prices in 70 major Chinese cities fell by 0.4% in December from the prior month, maintaining a pace of decline not seen since 2015, according to data released Wednesday and analysis using Wind Information.

Real estate, which makes up well over 20% of China’s economy, has seen a government crackdown on developers’ high reliance on debt for growth.

Investment into real estate fell by 9.6% in 2023, while those into infrastructure and manufacturing rose by 5.9% and 6.5%, respectively.

Overall, fixed asset investment for 2023 rose by 3%, a touch above the predicted 2.9% increase.

China’s property sector is in a process of “adjustment and transformation,” Kang Yi, director of the statistics bureau, told reporters in Mandarin, translated by CNBC.

Looking ahead to 2024, he said the economy faces a number of challenges including insufficient domestic demand, overcapacity in some industries and weak expectations about the future.

Kang said authorities needed to respond to those difficulties in accordance with the directives from China’s top leaders in an annual meeting last month.

The bureau had temporarily suspended the release of the younger age group’s unemployment rate in summer, citing the need to reassess calculation methods. That unemployment rate had previously climbed to records above 20%.

The statistics bureau said China’s population shrunk by more than 2 million people to 1.41 billion in 2023 from the prior year. The population had declined by 850,000 people in 2022 from 2021.

“The improvement [in youth unemployment] is a bit surprising to me, but I can see that it is a result of government efforts and not so much economic fundamentals,” Dan Wang, chief economist at Hang Seng Bank, said Wednesday on CNBC’s “Street Signs…