China Economy: UBS predicts nearly 5% GDP growth for China in 2023
Swiss firm UBS has released its economic outlook for China this year. The financial services company expects the Chinese economy to make a strong recovery, with significant growth in the A-share market. Chen Tong reports.
UBS says individual investor confidence in the A-share market was sluggish in 2022, but that’s likely to see a turn with earnings growth in A-shares expected to reach 15 percent up from just 4 percent last year.
Sectors such as internet, food and beverage, and new energy supply chain will see major growth this year.
MENG LEI China Equity Strategist, UBS Securities “UBS economists expect China’s economy to grow 4.9 percent in 2023. Higher GDP growth will lead to rebound in revenue growth listed universe. On the margin, the falling global commodity prices will then support the downstream margins. Higher revenue and margin expansion will lead to earning growth recovery for Chinese A-share market. In summary, earnings recovery, valuation re-rating will lead to around 20 percent of market upside of next 12 months.”
UBS also says Chinese companies remain enthusiastic about entering the capital market in 2023. Last year, more than 400 initial public offerings were issued in China – over 80 percent were via the registration-based IPO system. This year, the number of IPOs is set to meet that and more.
SUN LIJUN Co-Head of UBSS Global Banking “With the full launch of the registration-based system, IPO financing and refinancing of A-shares will remain active. We expect the overall scale and the number of IPOs to remain at 2022 levels, or even surpass the figures from last year.”
CHEN TONG Shanghai “UBS’s predictions about China’s economy are similar to many other financial institutions’. A majority expect the country’s GDP growth to reach around five percent in 2023. Some optimists even predict nearly six percent growth. One thing is for sure – China’s gradual reopening will set a strong foundation for more economic opportunities. CHEN TONG, CGTN, SHANGHAI.”