As China shifts away from a zero-Covid policy and eases restrictions, the leadership will be prioritizing economic recovery in 2023. This comes as China reported its monthly trade data for November, which was the lowest in two and a half years.
Cross-border Covid restrictions between Hong Kong and mainland China were lifted last week, reducing transit times and costs of trucking shipments. But recovery will be slow. Even as restrictions in Beijing have lifted, almost no one is venturing out as residents are staying home with fears of a Covid breakout.
McKinsey’s 2023 China Consumer Report shows that despite enormous challenges, the economy is showing a level of resilience:
- China’s consumer confidence is at a 10-year low
- 58% of urban households intend on saving money in the bank (highest level since 2014)
- Nominal disposable income per capita rose by 5.3% in the first three quarters of 2022
- Urban unemployment has held steady at 5.5% in September, comparable to pre-pandemic levels
- Inflation rose by only 2.0% in the first nine months of 2022
1. Forwarder cheer as restrictions on Hong Kong cross-border trucking ease, The Load Star, Dec 12, 2022. Accessed Dec 19, 2022.
2. As China ‘shifts gears’ on zero-Covid, leaders vow that ensuring economic stability is now top priority, South China Morning Post, Dec 7, 2022. Accessed Dec 19, 2022.
3. 2023 McKinsey China Consumer Report: A Time of Resilience, McKinsey & Company, Dec 8, 2022. Accessed Dec 19, 2022.
4. As Covid Spreads Fast, Beijing Isn’t in Lockdown. But It Feels Like It. New York Times, Dec 13, 2022. Accessed Dec 19, 2022.