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China’s economic growth is slowing as GDP data show Xi Jinping’s zero-COVID policy took its toll

Xi JinpingXi Jinping, the leader of China, oversaw a restrictive program of COVID lockdowns that he has relaxed after a wave of protests.

REUTERS/Denis Balibouse

  • Economic data released Tuesday in China show its growth slowed amid the government’s zero-COVID policy. 
  • The National Bureau of Statistics of China said the economy expanded by 3% from a year prior. 
  • That growth for 2022 is below expectations of 5.5% GDP growth that Chinese officials had set.

The National Bureau of Statistics of China said the country’s economy expanded by 3% in 2022, below Chinese officials’ expectations of a 5.5% increase. The data showed the impact from the government’s zero-COVID policy.

Gross domestic product data released early Tuesday in China showed growth was below the 8.1% increase in GDP that the country reported for 2021

During the pandemic, China’s leader Xi Jinping has overseen a highly restrictive program of lockdowns aimed at stopping the spread of COVID-19. He relaxed this policy after a wave of protests last year.

Economists are now figuring out how the rapid reopening of China’s economy, the second-largest in the world after the United States, squares with a global economic slowdown.

“Beijing appears to be opting for a ‘big bang’ style exit from zero-COVID — one where the infection peak is passed as soon as possible — versus the staged process we had earlier envisaged,” investment strategists at the Swiss bank UBS wrote in a note to clients earlier this month.  

Strategists led by Mark Haefele, the chief investment officer of UBS Global Wealth Management, said pent-up savings and a return to social activities in China this year should lead to improved economic growth. Haefele said he expects GDP to recover to around 5% this year. 

GDP in China rose 2.9% in the fourth quarter from a year prior, according to a press release

Read the original article on Business Insider