China's Economy Outlook 2023

The Central Economic Work Conference, the annual meeting where China's top leaders meet to decide the economic and policy outlook for the year ahead, was held in Beijing on December 16th. The conference, convened by the Central Committee of the Communist Party and the State Council, discussed topics outlined by the Politburo Standing Committee. The event focused on proactive fiscal and monetary policies to stimulate the economy and was particularly significant because it marked the first meeting of the new Party leadership following the nominations at the twentieth congress in November.

During the conference, it was confirmed that the Country's economic performance is expected to improve in the coming year after abandoning its growth target of 5.5 percent set for 2022 due to coronavirus disruptions and lockdowns imposed across the cities. The International Monetary Fund estimated China's economic growth to be 3.2 percent in 2022 and 4.4 percent in 2023.

China plans to strengthen its domestic market and foreign trade relations by participating in free trade agreements, such as the Comprehensive and Progressive Trans-Pacific Partnership (among 11 Asian countries), the Digital Economy Partnership Agreement (between New Zealand, Singapore, and Chile), and new free trade agreements with countries and regions (such as the one promoted with the Gulf countries).

The GDP growth target for next year is agreed upon during the Economic Work Conference and will be disclosed by the Chinese premier in March of the following year during the annual legislative meeting; analysts anticipate a growth target between 5 and 5.5 percent for 2023

With regard to the forthcoming reopening, institutions and investment banks have updated their outlook on the Chinese economy upwards.

Among the forecasts, The Economist predicts that China's GDP growth will be 5.2 percent in 2023, Morgan Stanley estimates 5.4 percent, Standard Chartered 5.8 percent and PwC 6 percent.

Beijing must revive consumption, which was hit first by the zero covid and now by the number of infections, as well as regulate the real estate market, which has been significantly impacted by the Evergrande affair but is preparing to reopen and provide incentives to businesses.

Italy is one of China's top eight destinations for foreign investment, with mergers and acquisitions increasing by 57 percent during the first half of 2022. Italy-China trade increased by 7.4 percent in the first eleven months of the year to USD 71.7 billion.