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The road back to growth in China

By Yu Yongding

09 May 2023 · 3 min read

Editor's Note

Barring a black swan event, China is on track to end a 12-year economic slowdown, Yu Yongding writes in PS. The key ingredient must be carefully planned and prudently funded infrastructure investment.

BEIJING – According to China’s National Bureau of Statistics, the economy grew by 4.5% year on year in the first quarter of 2023. While that hardly matches the robust growth of the pre-pandemic period, it did exceed market expectations. And with the right policies, China can do even better.

There is plenty of pessimism about China’s economic prospects nowadays, with many warning – not without reason – that China has entered a deflationary period. In the first quarter of 2023, China’s consumer price index (CPI) rose by only 1.3% year on year – down from 1.8% in the previous quarter. More striking, China’s producer price index (PPI) fell by 2.5% year on year in March – its sixth consecutive month of decline.

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