1、February EconomicMonitorIssue:2023 Q12 2023 KPMG Huazhen LLP,a Peoples Republic of China partnership,KPMG Advisory(China)Limited,a limited liability company in Chinese Mainland,KPMG,a Macau(SAR)partnership,and KPMG,a Hong Kong(SAR)partnership,are member firms of the KPMG global organisation of indep

2、endent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Key takeawaysChinas GDP grew 3.0%in 2022,below the 5.5%growth target set by the government last March.Q4 GDP grew 2.9%year-over-year(yoy),higher than market expectation.H

3、eadwinds such as the highly transmissible Omicron variant of COVID-19,slowdown of the real estate market,rapid interest rate hikes by the US Fed,and geopolitical uncertainty weighed on the Chinese economy last year.Meanwhile,despite slower economic growth,the size of Chinas GDP reached RMB 121 trill

4、ion(USD 18 trillion),showcasing Chinas underlying strengths as a large domestic market.When China reversed its zero-COVID policy in early December 2022,the country saw a rapid wave of infections in subsequent weeks.However,the earlier than expected re-opening has also accelerated the countrys econom

5、ic recovery.Using road traffic congestion as an indicator of the pace of the recovery,we estimated,as of mid February 2023,two thirds of the major cities have seen activity rebounded to levels higher than the same period before the pandemic.In contrast to many advanced economies,recovery of consumpt

6、ion in China has lagged compared to industrial production and exports.However,we expect consumption to become a key driver for Chinas growth this year.Consumer spending,especially for services and discretionary,is expected to see a stronger rebound.As an example,holiday spending during the Chinese N