CHICAGO — China is expected to maintain its position as the engine of global economic growth in 2023, according to estimates from investment banks and Wall Street. Economic growth in the Asia-Pacific region is expected to outpace that of the West this year.
“In recent weeks, we have received mixed news on the Chinese economy,” said Paul Woodward, chairman of Paul Woodward Advisory. “Many have been disappointed by the 5.5% GDP growth in the first half of the year. Others, however, point to the enormous size of the Chinese market and, with inflation very low compared to North America and Europe, suggest that the country is resuming its role as the engine of growth in the global economy.”
JP Morgan’s mid-year market outlook suggests that the first half of 2023 has been strong in the Asia-Pacific region, driven largely by China’s end of zero-COVID policies and reopening. GDP gains have averaged 5.2% above regional potential, and China is expected to see overall GDP growth of 5.5% in 2023. This forecast is also in line with what Goldman Sachs expected for China earlier this year. In June, the World Bank upgraded its forecast for China’s 2023 growth to around 5.6%, up from an initial estimate of 4.3%.
By 2023, the Asia-Pacific region as a whole is expected to achieve GDP growth of 4.2% year-on-year, according to JP Morgan’s outlook.
Related. Automechanika Shanghai 2023 prepares to welcome international influx
“Since the spring, we have seen a recovery in trade show attendance, similar to that seen earlier in North America and Europe. China and Asia were quick to return to the market, but simply started later. Vendors are eager to return to the market, while the Chinese government now clearly recognizes the importance of trade shows in getting the export machine going. Chinese companies have returned in large numbers to many major international trade shows, particularly in Europe and Southeast Asia,” Woodward said.
Despite a decline in U.S. corporate interest in investing in China, down by as much as 45% according to the American Chamber of Commerce in China’s 2023 China Business Climate Survey, the Chinese economy is expected to continue growing in the second half of the year as companies continue to view the country as a priority market.
“With trade shows only really picking up in China in the spring, it’s still too early to tell which sectors will be strongest and which ones might be diminished by what’s happened over the last three or four years. International organisers with established portfolios in major Chinese cities are working hard this year to rebuild them to where they were. We expect M&A activity in China to likely be a bit slow for a few more months and organisers without a strong presence in the country will be very cautious about launching new events for some time. Chinese organisers and investors who were looking to invest elsewhere in the world before the pandemic seem uncomfortable with the reception they might get now, and we expect that trend to be on hold for another year or two,” Woodward said.
Contact Paul Woodward at pw@paulwoodward.com