Stocks in Asia mostly down after China reports slowest growth in decades

Asia-Pacific markets mostly traded lower Tuesday as investors digested a slew of Chinese economic data after the latest figures revealed that the China’s GDP grew by 3 percent in 2022, marking one of the slowest growth in decades.

In mainland China, both the Shenzhen Component the Shanghai Composite struggled for direction – the former trading fractionally higher by 0.12 percent and the latter down 0.10 percent. Similarly, Hong Kong’s Hang Seng index fell 1.1.08 percent while the Hang Seng Tech Index also shed 0.88 percent.

However, stocks in Japan bucked the trend with the Nikkei 225 rising 1.23 percent, leading gains in the region as the Bank of Japan kicked off its two-day monetary policy meeting. The yield on Japan’s 10-year treasury continued to test the upper ceiling of the central bank’s tolerance range. The Topix inched up 0.86 percent.

The Japanese yen weakened 0.12 percent against the US dollar to 128.69, while still hovering around the strongest levels since May 2022.

In Australia, the S&P/ASX 200 lost 0.03 percent as the nation’s Westpac consumer confidence rose 5 percent in December from 3 percent in November, Refinitiv data showed. South Korea’s Kospi fell 0.85 percent and the Kosdaq shed 0.8 percent.

Data from China

China reported 3 percent GDP growth for 2022 that beat expectations but did miss the official target of around 5.5 percent set in March. In 2021, China’s growth had rebounded by 8.4 percent from just 2.2 percent in 2020.

But result was better than a 2.8 percent forecast as the National Bureau of Statistics data showed Tuesday said fourth-quarter GDP rose by 2.9 percent, which also beat the expected 1.8 percent growth.

National Bureau of Statistics Director Kang Yi termed China’s 3 percent growth as “relatively fast” in light of unexpected situations and in contrast to Germany, the US and Japan. However, he said the global trade situation was not optimistic, and that the world economy may face stagflation.

“Businesses still face many difficulties in production and operation, scientific and technological innovation is not strong enough, and people still have considerable difficulties in employment,” Kang said. “We still need to make strenuous efforts to promote overall economic improvement.”

Kang said he expected real estate would not drag down growth in 2023 as much as it did in 2022. He also said he expects consumer prices will overall be stable in 2023 and that there’s no basis for a major increase.

Looking ahead to this year, JLL’s Bruce Pang expects support for the property market and the ability of people to move freely will help retail sales recover to 8 percent growth by the fourth quarter.

Retail sales drop didn’t drop as much as expected

Retail sales fell by 0.2 percent for the year. But retail sales in December declined by 1.8 percent from a year ago, less than the expected 8.6 percent plunge predicted by a poll.

Within retail sales, those of catering fell by 6.3 percent in 2022. Sales of apparel, cosmetics and jewelry all declined for the year. Medicine was one of the bright spots, after sales surged by nearly 40 percent in December from a year ago.

Online retail sales of physical goods rose by 17.2 percent in December from a year ago, according to CNBC calculations of official data accessed through Wind. Those online sales accounted for 27.2 percent of total retail sales.

Meanwhile, industrial production rose by 3.6 percent in 2022. The figure rose by 1.3 percent in December, well above the predicted 0.2 percent fall.

Fixed asset investment for 2022 rose by 5.1 percent. Infrastructure investment on a year-to-date basis grew faster in December than in November, while investment into manufacturing slowed its growth. Real estate investment fell by 10 percent in 2022, a steeper drop than recorded for the year through November.

The unemployment rate in cities was 5.5 percent as of December, while that of younger people ages 16 to 24 remained far higher at 16.7 percent.

“The foundation of (the) domestic economic recovery is not solid as the international situation is still complicated and severe while the domestic triple pressure of demand contraction, supply shock and weakening expectations is still looming,” the National Bureau of Statistics said.

Real estate remained in a slump, despite authorities’ easing financing restrictions for developers and homebuyers. Exports started to fall in October on a year-over-year basis — the first decline since May 2020, according to Wind Information.

In December, exports and imports both fell, albeit by slightly less than analysts expected. Economists anticipate a drop in demand for Chinese goods from an economic slowdown in the EU and U.S.

China’s leaders are set to announce the full-year GDP growth target in March at an annual parliamentary meeting. It will be the first such gathering since Chinese President Xi Jinping consolidated his power in October at a national congress of the Communist Party of China.

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