China's economic recovery is off to a slow start

In the last few years, China has encountered large setbacks in growth and overall productivity within its market economy. This can be explained through the various lockdowns and restrictions that the Chinese government enforces to prevent a COVID-19 outbreak. In December 2022, China announced a lift on its travel ban which would restrict migrant workers and tourists from coming into the country and contributing to China's overall GDP. This is an essential part of China's economic recovery process, although, it is predicted they will have another slow to moderate growth year in 2023. 

Many migrant workers have returned back to full work activities after the December/January holiday season, allowing for productivity to return to their base number. After all, production in an economy can be solely correlated to GDP growth from both the consumer and producer. These workers are contributing to the production of goods and services which are then bought by consumers and is a process that typically repeats at higher rates over decades of time. Data from the bureau of statistics of labor suggests that inflation has not had as large of an impact on China's economy as they predicted. From a year ago, consumer prices in china have seen a 2.1% increase. Although, food and energy prices have seen a much larger increase in price separate from the cost of many other goods and services.

On top of encouraging inflation rate numbers, road, and subway traffic in cities has returned to pre-pandemic levels. This is likely explained by a large increase in tourism and migrant workers within China due to the lift of the travel ban that China enforced in December.

Some setbacks in China's economy include a decrease in their turnover in freight transport from last year, high unemployment, a decrease in demand for medium to long-term house loans, weak currency, and low new home sales. 

Policy Outlook:

Given current information, policymakers are expected to encourage any and all policies that benefit the domestic economy. Ting Lu, the chief China economist says "We still believe inflation is not a major concern in China this year and we expect policy to remain accommodative in 2023". It is also expected that policy will remain loose in 2023 and will follow a“growth-focused policy pragmatism.”

Finally, Robin Xing, chief China economist at Morgan Stanley believes that GDP growth in 2023 will be around 5.7%. But given the information presented above and the lift of China's travel ban, I am predicting GDP growth in China will be around 7% in the year 2023.

https://www.cnbc.com/2023/02/15/chinas-economic-recovery-is-off-to-a-slow-start.html#:~:text=Preliminary%20economic%20data%20indicate%20overall,Covid%20controls%20in%20early%20December.