China's economy grew by 5.2 percent in 2023, surpassing the government's official target and signaling a positive rebound from the impacts of COVID-19 restrictions. The country's National Bureau of Statistics reported a corresponding 5.2 percent growth in the final quarter of the year compared to the same period in 2022.

Kang Yi, the head of the bureau, acknowledged the hard-fought expansion but cautioned about the challenges that lie ahead. Yi pointed to a complex external environment and insufficient demand as potential obstacles to sustained growth in 2024.

After a sluggish growth rate of just 3 percent in 2022 due to COVID-19 regulations, China set a growth target of around 5 percent for the following year. However, the economy faced headwinds such as a prolonged crisis in the property market, subdued consumer and business confidence, and a global economic slowdown. Additionally, geopolitical tensions with the United States and efforts by some Western nations to reduce dependence on China affected growth.

Chinese officials are expected to release the growth target for 2024 in March. China aims to regain the trust of international investors who have become hesitant about the country's growth potential. Premier Li Qiang, speaking at the World Economic Forum in Davos, assured the audience that China achieved its economic target without relying on massive stimulus. He emphasized the country's strong long-term development fundamentals and reiterated China's commitment to opening up to the outside world.

However, challenges persist in the era of President Xi Jinping. Concerns were raised after authorities conducted raids on consultancy and due-diligence firms following the expansion of espionage laws. The property market crisis, which accounts for about a quarter of the economy, also remains unresolved. Another significant issue is the high unemployment rate among the country's youth, with over one in five people aged 16 to 24 reported as unemployed in May.

China also faces a long-term concern over its growth potential due to a declining population. In 2023, the country's population dropped by 2.08 million, a decline of 0.15 percent, mainly caused by a record low birth rate and the impact of COVID-19 deaths following the lifting of the zero-COVID policies. The total number of deaths rose by 6.6 percent to 11.1 million, with the death rate reaching its highest level since 1974. New births saw a significant decline of 5.7 percent, with the birth rate hitting a record low of 6.39 births per 1,000 people.

As China navigates these challenges, the focus now turns to the government's policies and strategies to sustain economic growth in the coming years and attract both domestic and international investment.