China's Economy Grows 5% in 2024 Amid Manufacturing Surge and Stimulus Efforts
China: China’s economy grew by 5% in 2024, slightly exceeding economists’ forecasts of 4.9%, driven by strong manufacturing and front-loaded exports ahead of anticipated US tariffs. The National Bureau of Statistics reported a notable recovery in the fourth quarter, with GDP expanding 5.4% year-on-year after slowing in Q3. However, this annual growth rate, the lowest since 1990 excluding pandemic years, reflects ongoing economic challenges. Beijing has responded with monetary easing, stock market support, and a local government debt refinancing program to stimulate infrastructure investment, though concerns over entrenched deflation persist, with producer prices in negative territory for over two years and consumer prices rising just 0.1% in December.
Retail sales grew by 3.5% in 2024, highlighting weak consumer confidence amid a prolonged housing downturn, while industrial output rose 5.8% due to manufacturing strength. Residential property prices declined in major cities, though Shanghai saw gains in new home prices. China’s population declined for the third consecutive year, shrinking by nearly 1.4 million, as 9.54 million births were outweighed by 10.93 million deaths. The country’s trade surplus hit a record of nearly USD 1 trillion, fueled by robust exports as manufacturers ramped up production to offset weak domestic demand, while import growth remained subdued.
Analysts expect Beijing to set its 2025 growth target at around 5% for the third consecutive year when the National People’s Congress convenes in March. However, trade faces potential headwinds, with newly elected US President Donald Trump threatening higher tariffs. Doubts over the accuracy of China’s official economic data persist, as analysts question whether reported growth figures fully capture the underlying weaknesses in the economy.
Source: Financial Times