China is experiencing a double dose of disappointing data for the government’s ambition of reversing a gloomy economic outlook. Official figures showed the country’s population fell more than 2mn to 1.41bn last year, while its economy grew at one of the lowest rates in decades.
Gross domestic product expanded 5.2 per cent in 2023, hitting Beijing’s low-growth target of about 5 per cent, its lowest level for more than 30 years. But analysts said the data highlighted the deflationary pressures and property slowdown weighing on domestic demand and confidence.
A good barometer for the Chinese economy is Alibaba Group. Alibaba Group Holding Limited is a Chinese multinational conglomerate that specializes in e-commerce, retail, and technology founded by Jack Ma. According to the company’s financial report for the second quarter and six months ended September 30, 2023, the company’s sales were CNY 224,790 million compared to CNY 207,176 million a year ago. The net income was CNY 27,847 million compared to a net loss of CNY 20,433 million a year ago.
Alibaba’s stock price has underperformed the market in the past few years, with the company’s stock plunging by over 76% from its highest level on record. Alibaba is battling numerous challenges that have affected its performance, including a challenging regulatory climate at home, competition from other companies, and a highly restrictive regime that has hit its profitability.
Alibaba’s continued malaise can be attributed to an earnings report that missed expectations on the top line, as well as the continued, intensifying regulatory assault on China’s internet giants. However, this may reflect the general challenges in the Chinese economy.
The year of the dragon has historically augured a spike in births in China and other countries in east Asia as potential parents try to time the births of their offspring with an auspicious zodiac sign.
But experts said this demographic idiosyncrasy was unlikely to come to Beijing’s aid in this dragon year which begins in February after a gloomy economic outlook, ageing society and the coronavirus pandemic. But there can be no doubting how Beijing’s currently favored sectors, green tech and renewable energy infrastructure are raging ahead.
Alibaba’s CEO Daniel Zhang has outlined details of a plan to split Alibaba into six main groups as a prelude toward stock listings of some of its companies. The restructuring marks a new stage in Alibaba’s growth after a series of setbacks as regulators tightened oversight of the industry. Perhaps this also indicates a stabilization and improvement in China’s economy is on its way.
