China's economy slows sharply in Q4, 2022 growth one of the worst on record

Chinese policymakers vow to step up support for economy in 2023

China's economy slowed sharply in the fourth quarter due to stringent COVID curbs, dragging down 2022 growth to one of its worst in nearly half a century and raising pressure on policymakers to unveil more stimulus this year.

Gross domestic product (GDP) grew 2.9% in October-December from a year earlier, data from the National Bureau of Statistics (NBS) showed on Tuesday, slower than the third-quarter's 3.9% pace. The rate still exceeded the second quarter's 0.4% expansion and market expectations of a 1.8% gain.

On a quarterly basis, GDP came in at 0.0% in the fourth quarter, compared with growth of 3.9% in July-September.

Beijing last month abruptly lifted its strict anti-virus measures that had severely restrained economic activity in 2022, but the relaxation has also led to a sharp rise in COVID cases that economists say might hamper near term growth.

For 2022, GDP expanded 3.0%, badly missing the official target of "around 5.5%" and braking sharply from 8.4% growth in 2021. Excluding the 2.2% expansion after the initial COVID hit in 2020, it's the worst showing since 1976 - the final year of the decade-long Cultural Revolution that wrecked the economy.

Growth is likely to rebound to 4.9% in 2023, as Chinese leaders move to tackle some key drags on growth - the "zero-COVID" policy and a severe property sector downturn, according to a Reuters poll. Most economists expect growth to pick up from the second quarter.

Beijing's abrupt lifting of COVID curbs last month has prompted analysts' upgrades of its economic outlook and a jump in Chinese financial markets, but businesses have struggled with surging infections, suggesting a bumpy recovery in the near term.