The BGA China Team, led by Senior Adviser Haiying Yuan, wrote an update to clients on the country’s economic prospects after the release of promising economic growth data.

Context

  • China’s economic data for March and the first quarter of 2023 show signs of a gradual recovery. However, the country has not completely rebounded since it lifted its pandemic restrictions.
  • China recently eased several of its pandemic-related travel restrictions, resumed issuing tourist visas and began reinstating 10-year visas, but some travel hurdles remain. Despite China’s efforts to reopen its borders and assure the world that it is open for business and diplomacy, international travel into the country is still challenging and expensive.

Significance

  • Chinese exports will face challenges in the foreseeable future amid weak global demand. Nevertheless, export growth of China’s “new big three” — electric passenger cars, lithium batteries and solar cells — amounted to nearly $39 billion in the first quarter, an increase of 66.9 percent year-on-year that underscores the resiliency of China’s high-end manufacturing sector.
  • Households and the industrial sector are still under pressure, according to recent economic data. Urban household income in the first quarter grew 2.7 percent year-on-year, an improvement from last year but only about half the growth in 2019.

Implications

  • Premier Li Qiang said China’s business environment will be friendlier to foreign entities this year as officials look to increase foreign direct investment into the country, raise foreign confidence in China’s business environment and boost domestic tourism.
  • Officials at the Chinese Embassy to the United States recently delivered a pro-business message to U.S. companies, including BGA. Embassy contacts said China’s “reforming and opening” period — characterized by high-standard and high-quality development — will not change in the long term.
  • Travel to China will likely remain limited and costly due to geopolitical strains, airline regulatory hurdles and remaining pandemic-related restrictions. The total number of international flights to China this March was only about a quarter of the number in March 2019.

We will continue to keep you updated on developments in China as they occur. If you have any comments or questions, please contact BGA Advisor Eric Wang at ewang@bowergroupasia.com.

Best regards,

BGA China Team

A small ginko leaf

Senior Advisor

Yuan is a well-established voice contributing to business and diplomatic circles in Beijing. Since founding Yuan Associates in 2004, Yuan and his firm have served more than 200 clients and become major players in China’s growing government affairs industry. Yuan has 30 years of experience working with the Chinese government, including senior diplomatic postings. He served in Washington, D.C. as China’s agriculture attaché and in Rome as the alternate representative to the United Nations Food and Agriculture Organization. In Beijing, he directed the Department of International Cooperation at the Ministry of Forestry. After retiring from public service, Yuan worked as ... Read More