CHICAGO — China is expected to keep its footing as the driver of the world’s economic growth in 2023, according to estimates made by investment banks and Wall Street. The economic growth in the Asia Pacific region is set to outpace the West this year.
“We have seen a mixed bag of news about China’s economy in recent weeks,” Paul Woodward, Chairman, Paul Woodward Advisory, said. “Many have been disappointed by 5.5% GDP growth in the first half of the year. Others, however, point to the huge size of the Chinese market and, with very low inflation there compared to North America and Europe, have suggested that it is resuming its role as the key growth engine driving the world economy.”
J.P. Morgan’s mid-year market outlook reports that the first half of 2023 was strong in the Asia Pacific region, mostly driven by China ending its zero-COVID policies and reopening. GDP gains averaged 5.2% above the regional potential, and China is expected to see 5.5% gains in GDP in 2023 overall. This forecast is in line with what Goldman Sachs expected from China earlier in the year as well, and in June, the World Bank raised its prediction that China’s 2023 growth would be around 5.6% from the original 4.3% estimate.
In 2023, the entire Asia Pacific region is forecasted to reach 4.2% YOY GDP growth, according to the J. P. Morgan outlook.
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“Since the spring, we have seen a bounce-back in trade fair participation similar to what we saw earlier in North America and Europe. China and Asia haven’t been slower to come back than other western markets. They just started to come back later. Sellers are keen to get back in the market while the Chinese government now clearly recognizes the importance of exhibitions in priming the pumps of the export machine. Chinese companies have returned to many important international trade fairs in good numbers particularly in Europe and SE Asia,” Woodward said.
Despite, decreasing interest from U.S. businesses in investing in China, down to 45% according to the American Chamber of Commerce in China’s 2023 China Business Climate Survey, China’s economy is expected to continue growing in the second half of the year with businesses still viewing the country as a priority market.
“As trade fairs only really started coming back online in China in the spring, it’s slightly early days to be sure about which sectors will be strongest and which may be reduced by what’s happened over the last 3-4 years. Those international organizers with an established portfolio in major Chinese cities are working hard this year to build them back up to where they were. We would anticipate that M&A activity there will probably be a bit slow for another few months and that organizers without a strong presence in the country will remain very cautious for a while about launching new events. Chinese organizers and investors who were, pre-pandemic, looking to invest elsewhere in the world seem uncomfortable with the welcome they might now receive, and we believe that trend to be on hold for another year or two,” Woodward said.
Reach Paul Woodward at pw@paulwoodward.com
