China’s rose-tinted growth is scrutinised through jaundiced eyes as foreign interests remain weak and wary

Much-ballyhooed GDP growth and other testaments to China’s strength may not be having the reassuring effect that Beijing is hoping for, highlighting urgent need for uplifting policies

Foreign chambers and economic analysts say challenges related to national security, data flows and market barriers still dominate hearts and minds in decision-making

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China’s boasting of its 2023 economic growth has been met with scepticism over whether it can hold up this year. Illustration: Henry Wong

Published: 6:00am, 29 Jan 2024

In the typically quiet resort town of Davos, Switzerland, Chinese Premier Li Qiang surprised participants at this month’s World Economic Forum with his sonorous declaration that China’s gross domestic product (GDP) had grown by 5.2 per cent in 2023.

The early and unexpected disclosure by China’s No 2 political figure was intended to send a clear message that the world’s second-largest economy had shrugged off the crippling effects of its zero-Covid policies during the pandemic, and that it would remain attractive to foreign investors.

Beijing was presenting its expectation-surpassing annualised growth rate as evidence that second thoughts about investing in China were unwarranted, as were growing tendencies among companies to diversify away from the fastest-growing major economy.

However, the declaration has largely failed to prevent a dwindling of confidence – be it among the foreign business community, private entrepreneurs or domestic consumers.

Across China, a large cross-section of foreign businesses is struggling to cope amid what has been a gulf between their tepid business performances and Beijing’s rose-tinted account of the economy.

Instead, challenges pertaining to national security, data flows and continued market barriers dominate hearts and minds, fuelling doubts about increasing investments in China, as well as contemplations about exploring overseas opportunities.