Railway builders erect a box girder at the benchmark project site in front of the Huning section of the Shanghai-Nanjing-Hefei high-speed railway in Suzhou, Jiangsu province, China, 10 January 2025.
Costfoto | Nurfoto | Getty Images
China’s economy expanded by 5% year-on-year in 2024, with a pick-up in the final quarter of the year as a slew of stimulus measures kicked in and helped meet Beijing’s growth target.
According to China’s National Bureau of Statistics, fourth quarter GDP beat expectations with 5.4% growth. Economists polled by Reuters had estimated a 5.0% increase in the last quarter.
This was a faster increase compared to 4.6% in the third quarter, 4.7% in the second quarter, 5.3% in the first quarter.
Economic expansion for the full year was lower compared to a 5.4% increase in 2023 after the pandemic. As part of an annual revision of preliminary figures, the statistics bureau in late December revised 2023 GDP growth to 7.4%, according to a CNBC calculation of official data.
But the Bureau of Statistics warned: “We must be aware that the negative effects brought by the external environment are increasing, internal demands are insufficient.” He called for the implementation of “more proactive and effective macro policies”.
In December, retail sales rose 3.7% from a year earlier, beating the Reuters forecast of 3.5%. Industrial production expanded 6.2% from a year earlier, against expectations of 5.4%, underscoring China’s imbalance between domestic output and weak demand.
Full-year fixed-asset investment rose 3.2% in 2024, compared with a 3.3% rise forecast in a Reuters poll, as the drag on real estate investment widened to a 10.6% decline, compared with with the period January-November.
The urban unemployment rate rose to 5.1% in December from 5.0% in the previous month.
The disposable income of urban residents increased by 4.4%, while that of rural residents increased by 6.3% in 2024.
The national population fell by 1.39 million in 2023, to 1.408 billion people.
China has been trying to boost economic growth and has taken several measures to that end.
Since late September, Chinese authorities have called for a halt to the real estate slump, cut interest rates and announced a five-year fiscal package worth 10 trillion yuan ($1.4 trillion) to ease local government funding crunches. . Beijing has also expanded a program for consumers to trade in used cars and home appliances and buy new ones at a discount.
Top leaders have promised “proactive” fiscal measures and a “moderately loose” monetary policy stance for the current year.
Some analysts expect the stimulus could begin to take effect this year, but it will take longer to see a significant impact.
The slump in real estate and uncertainty about future incomes have weighed on consumer spending and business confidence, adding to concerns about deflation.
Consumer inflation in China remained barely above zero, while wholesale prices fell for a 27th straight month in December, official data showed last week.
The government is expected to unveil official growth targets for 2025 and additional stimulus measures at annual parliamentary meetings in March.
Economists predict that China will maintain its GDP growth target for 2025 at around 5%, if not slightly lower.
Friday’s data comes just days before Donald Trump is inaugurated as the next US president on January 20. Trump has said that immediately after taking office, he plans to impose additional tariffs of at least 10% on Chinese goods. He has also appointed several China hawks to key cabinet posts.
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