The Chinese economy wrapped up 2023 with target-beating growth despite domestic challenges and external pressure, providing a strong impetus for the global economy.

China's gross domestic product (GDP) grew 5.2 percent year on year to a new high of 126.06 trillion yuan (about 17.7 trillion U.S. dollars) last year, the National Bureau of Statistics said on January 17.

The growth rate is higher than the government's annual target of around 5 percent and exceeds the 3 percent increase in 2022.

China has accomplished the major targets set for 2023 and seen a solid rebound and improvements in economic performance, said Kang Yi, head of the bureau, who also warned of difficulties and challenges ahead.

An aerial drone photo taken on January 1, 2024 shows the Yangpu Economic Development Zone at sunrise, south China's Hainan Province. (XINHUA) 

Global Growth Engine

China's contribution to global GDP growth is expected to reach over 30 percent in 2023, making it the strongest growth engine in the world, Kang told a press conference.

"China's growth not only outpaces the estimated global growth of 3 percent, but also ranks top among major economies," Kang said.

Despite a downward trend in global trade, China's exports logged an increase last year. Its consumer price index, up 0.2 percent last year, was "in stark contrast" with persistently high inflation in some countries, Kang said.

Wednesday's data also revealed that key segments of the economy, including consumption and service activity, have recovered after China adjusted its COVID-19 response at the beginning of 2023.

Tourists check out in a duty-free shopping mall in Sanya, south China's Hainan Province, on September 30, 2023. (XINHUA) 

Consumption was a significant growth driver last year. Final consumption contributed 82.5 percent to GDP growth in 2023, with retail sales of consumer goods up 7.2 percent year on year to over 47 trillion yuan.

The service sector saw its value-added output rise 5.8 percent from a year ago, accounting for 54.6 percent of the GDP, the data showed.

On the real estate sector, Kang said there were some positive changes in the market, citing narrower declines in major indicators such as property development investment and the sales of commercial housing.

"It was no easy feat for China to keep up recovery momentum throughout the year and achieve its annual GDP target," said Wen Bin, chief economist at China Minsheng Bank, describing the growth as a zigzag yet forward-going trajectory.

People visit the 2023 China International Fair for Trade in Services (CIFTIS) at China National Convention Center in Beijing, capital of China, on September 2, 2023. (XINHUA) 

Favorable Conditions for Growth

When asked about China's economic outlook in 2024, Kang said the economy will continue to rebound and improve as "the country's long-term sound fundamentals remain unchanged."

China's economic development this year is underpinned by various favorable conditions, including sound economic momentum, strong resilience, great vitality, deepened reform and opening-up, and ample policy space, Kang said.

The positive effects of an array of measures introduced in 2023, including the issuance of more government bonds, tax and fee cuts, as well as the reserve requirement ratio and interest rate reductions, are expected to extend to this year, he said.

China will further enrich its policy toolbox and better leverage the combined effects of these measures, Kang added.

Tourists take part in a new year event at the Harbin Ice-Snow World in Harbin, northeast China's Heilongjiang Province, on December 31, 2023. (XINHUA) 

Several international organizations, such as the Organization for Economic Cooperation and Development and the International Monetary Fund, also gave a nod to China's economic prospects in 2024 and revised up their growth forecasts for China.

Nevertheless, Kang cautioned that the economic development still faces difficulties and challenges as the external environment has become more complex and severe with increased uncertainties.

"The Chinese economy will surely rise to the challenges and secure an effective improvement in quality and a reasonable increase in quantity," Kang said.