With ‘Zero Covid’ Behind It, China’s Economy Starts to Recover

Tuesday’s report on gross domestic product indicates that China, the world’s second-largest economy, is coming back to life.

“The quarterly growth is beginning to show a hoped-for healthy rebound,” said Louise Loo, an economist specializing in China in the Singapore office of Oxford Economics. “A very decent 4.5 percent year-over-year growth pace at this early stage of the reopening also provides the space for authorities to provide support to weaker segments of the economy as needed.”

China has taken steps to stimulate growth. The government is investing in high-speed rail lines, highways and bridges, money that helps boost jobs and consumers. The central bank, the People’s Bank of China, told commercial banks last month that they could hold slightly smaller reserves against possible losses, freeing them to lend more.

The growth in the first months of this year was a considerable improvement from the 2.9 percent pace in the final quarter of last year, when a wave of illness swept across the country after pandemic controls were lifted, and is close to the 5 percent target Beijing has set for 2023.

Spending has been strongest for services like travel and meals. Hotels in Beijing and Shanghai that turned off elevators last year and often had a single diner in 200-seat restaurants now find themselves with lines of people waiting for a table at breakfast. Most of that activity has been driven by Chinese consumers, as flights into the country have been slow to resume.

Article source: https://www.nytimes.com/2023/04/17/business/china-gdp-q1-2023.html