5 Key Industries to Watch in China in 2023

2022 set the tone for a turning point in China’s economy. After several COVID-19 outbreaks throughout the year, which led to a widespread economic slowdown, Beijing has abandoned the most stringent aspects of its Zero-Covid policy to facilitate the resumption of industrial activity and speed up production.To get more china business market news, you can visit shine news official website.

In response to Beijing’s shift to “living with COVID”, analysts have raised their forecasts for China’s real GDP growth to 5.2 percent in 2023 (from 4.7 percent) and 4.8 percent in 2024 (from 4.5 percent). Analysts at J.P. Morgan increased their estimates of the country’s annual growth rate to 4.3 percent from 4 percent.

That said, in coming months, China’s economy will still face several internal and external headwinds, such as weak domestic consumption, declining business confidence, and disruptions caused by the surge of COVID-19 infections. This has prompted calls for strong and focused policies to help restore private sector business activity in 2023.Unsurprisingly, top leaders and policymakers were committed to accelerating policy measures to bolster the faltering economy at the 2022 closed-door Central Economic Work Conference (CEWC). Indeed, as set out in the CEWC, China will double down on economic growth in 2023, with anticipated measures to boost domestic demand, attract and utilize foreign capital, stabilize the housing market, and restructure the technology industry.

Against this background, analysts have predicted that China’s economy will be able to see an above-trend sustained rebound starting from the second quarter of 2023, following the country’s reopening.The tourism and entertainment industry has a positive outlook for 2023, thanks to a more relaxed COVID policy and further opening.

The COVID-19 pandemic has had a catastrophic effect on the tourism sector, and due to stringent quarantine rules for visitors entering China, in the past two years, the majority of Chinese customers have been prevented from traveling abroad. However, the sheer scale of the local customer base, which has been eagerly rediscovering the country and its beautiful landscape, has allowed China’s tourism sector to rebound dramatically.

Camping and outdoor activities have become extremely popular since the start of the pandemic, and will likely continue to be so. Indeed, the growing popularity of camping is proof of the Chinese tourism sector’s adaptability and durability, as well as the kinds of novel opportunities that may materialize even in the face of severe constraints, proving that the industry will continue to grow.

Moreover, demand for industry services is expected to rebound over the next five years. The hotel sector’s structure will continue to change, with a larger portion of industry income coming from three- and four-star hotels. Foreign businesses now control the high-end industry, but they have recently been expanding into the lower star-rated segment to attract a wider range of clients and solidify their market positions.

Looking at China’s catering sector, revenue from cafes, bars, and other drinking establishments is anticipated to rise to RMB 6.03 trillion (US$894.36 billion) by the end of 2023. Coffee shops, for example, are expected to grow by 5 percent over the next five years, adding a total of 120,000 stores across the country. Revenue generated by the bar industry is projected to reach US$29.4 billion by 2025, with an impressive CAGR of 18.8 percent. As China continues to open up, people are likely to spend more on these types of activities.
Automotive is a key industry for developing countries like China, as it hosts an array of second and third-tier manufacturers, all supporting the major global manufacturers.

The new energy vehicles (NEVs) and automobile manufacturing industries in China have seen rapid growth. This has mainly been driven by the central government’s supportive policies and subsidies, growing environmental concerns, increased number of charging stations, and decreased operating costs for NEVs. Between 2017 and 2022, the industry revenue increased by 48.1 percent annually, and the industrial output grew from 794,000 units to over 5.6 million units in the same period. The China Association of Automobile Manufacturers (CAAM) predicted that China’s NEV sales in 2023 would grow by 35 percent year-on-year to 9 million units.

The NEV industry segment is expanding at an unprecedented rate, as part of Beijing’s conscious efforts to lower its carbon footprint while exploring the multi-billion-dollar market segment. In 2020, the Chinese government first introduced new measures to support the NEV industry – electric vehicles, plug-in hybrid vehicles, and fuel cell vehicles – which had been negatively impacted by the COVID-19 pandemic. It then announced the extension of such subsidies and incentives beyond 2022, as part of its plan to achieve 20 percent NEV deployment by 2025.