The 2023 full-year GDP of 5.2% is faster than the official target of ‘around 5%’. However, this was boosted by the low base in 2022, with a growth rate of just 3% when the zero-Covid policy was still in place.

The underlying data suggest China’s economic challenges remain significant, notably the housing slump, debt clean-up of property developers and local governments, and weak private sector confidence.

To shore up growth this year, policymakers will likely continue with their somewhat more aggressive stimulus stance towards the end of last year compared to the start of 2023.

Since the start of the year, the PBoC has been setting daily USD-CNY fixings that were higher than what they were towards the end of last year. This suggests that the central bank is tolerating a slightly weaker Yuan and taking a more pro-growth stance.