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The Chinese economy of 2023 almost definitely won’t look like the Chinese economy of 2019.To get more China economy news, you can visit shine news official website.

Real estate has slumped under Beijing’s crackdown. Exports have tapered off following a surge. Chinese e-commerce giant JD.com
this year replaced Huawei, hit by U.S. restrictions, as the largest non-state-owned enterprise in China by revenue.

In the last month, Beijing suddenly ceased many of the lockdown measures and Covid testing requirements that had weighed on economic growth over the last 18 months. Analysts warn of a bumpy road to full reopening, but they now expect China’s economy to bounce back sooner than previously forecast.

The elements underpinning that growth will almost certainly look different than they did three years ago, according to economists.

China’s growth model is moving from one highly dependent on real estate and infrastructure to one in which the so-called digital and green economy play greater roles, analysts at leading Chinese investment bank CICC said in their 2023 outlook released last month. They cited the ruling Chinese Communist Party’s 20th National Congress emphasis on innovation.

The digital economy category includes communication equipment, information transmission and software. Green economy refers to industries that need to invest in order to reduce their carbon emissions — electric power, steel and chemicals, among others.
Over the next five years, cumulative investment into the digital economy is expected to grow more than sevenfold to reach 77.9 trillion yuan ($11.13 trillion), according to CICC estimates.

That surpasses anticipated cumulative investment into real estate, traditional infrastructure or the green economy — making digital the largest of the four categories, the report said.

In 2021 and 2022, real estate was the largest category by investment, the report said. But the CICC analysts said that this year, investment into real estate fell by about 22% from last year, while that into the digital and green sectors grew by about 24% and 14%, respectively.

Beijing cracked down on developers’ high reliance on debt in 2020, contributing to defaults and a plunge in housing sales and investment. Authorities this year have eased many of those financing restrictions.

Fading exports
While much of the world struggled to contain Covid-19 in 2020 and 2021, China’s swift control of the virus helped local factories meet surging global demand for health products and electronics.

Now, demand is dropping. China’s exports started to fall year-on-year in October — for the first time since May 2020, according to Wind Information.

Next year, a reduction in net exports is expected to cut growth by 0.5 percentage points, Goldman Sachs Chief China Economist Hui Shan and a team said in a Dec. 16 note. Net exports had supported China’s GDP growth over the last several years, contributing as much as 1.7 percentage points in 2021, the analysts said.But China’s exports to the Association of Southeast Asian Nations have picked up, surpassing those to the U.S. and EU on a monthly basis in November, according to customs data.

“Exports to ASEAN countries may serve as a mild buffer to the pressures in EU and US markets,” Citi’s China economist Xiaowen Jin and a team said in a note Wednesday. They expect ASEAN’s GDP growth to rebound in 2023, while the U.S. and EU spend part of next year in recession.