The Chinese yuan weakened against the US dollar on Tuesday after many data points confirmed that the world’s second-largest economy is going through one of its worst periods in decades. Investor concerns were exacerbated by reports that China’s population saw its first decline in decades. What else is happening in Beijing?

According to the National Bureau of Statistics (NBS), the fourth-quarter gross domestic product (GDP) growth rate was 2.9% year-over-year, down from 3.9% in the third quarter. This topped market estimates of 1.8%. On a quarterly basis, the GDP was flat at 0%.

Industrial production slowed to an annualized rate of 1.3% in December, down from 2.2% in November. But, once again, the headline figure topped economists’ expectations of 1.8%. Industrial capacity utilization edged up to 75.7% in the October-to-December period.

December retail sales tumbled 1.8% year-over-year, up from -5.9% in the previous month. The market has anticipated a figure of -8.6%.

On the labor front, the unemployment rate fell to 5.5% in December, down from 5.7% in November.

This comes one day after the House Price Index declined 1.5% year-over-year last month, which was relatively unchanged from November.

“China’s domestic economy has suffered unexpected shocks in 2022, including frequent Covid outbreaks and extreme heatwaves,” Kang Yi, director of the NBS, told reporters at a news conference in Beijing. “The triple pressures of demand contraction, supply shocks, and weakening expectations continue to evolve, and the complexity, severity, and uncertainty of the environment are increasing.”

Although the numbers came in better than market forecasts, the data shows that the Chinese economy ended the year considerably weaker. So, is the worst over, or is more bad news to come?

Meanwhile, the world was stunned at the NBS reporting that the nation ended the year with 850,000 fewer people, the first population decline since the 1960s. In total, there were 1.41 billion people, with 9.56 million births compared to 10.41 million deaths.

Experts say that China’s population has been falling since 2018 as it possesses one of the lowest fertility rates in the world. This, according to economists, could result in a looming economic crisis that could be worse than Japan’s in the 1990s.

The yuan has been off to a strong start in 2023, rising nearly 2% against the US dollar.

The USD/CNY currency pair rose 0.6% to 6.7738, from an opening of 6.7336, at 12:57 GMT on Tuesday. The EUR/CNY surged 0.85% to 7.3479, from an opening of 7.2861.