Railway builders erect a box girder at the site of the standard project in front of the Huning section of the Shanghai-Nanjing-Hefei high-speed railway in Suzhou, Jiangsu province, China, on January 10, 2025.
Costfoto | Nurphoto | Getty Images
China’s economy expanded by 5% year on year in 2024, with an upswing in the final quarter of the year, as a flurry of stimulus measures kicked in and helped meet Beijing’s growth target.
Fourth-quarter GDP beats expectations with 5.4% growth, according to China’s National Bureau of Statistics. Reuters-polled economists had estimated a 5.0% growth in the final quarter.
That was faster growth compared with the 4.6% in the third quarter, 4.7% in the second quarter, 5.3% in the first quarter.
The full-year economic expansion was lower compared with a 5.4% growth in 2023 post the pandemic. As part of an annual revision to preliminary figures, the statistics bureau in late December revised the 2023 GDP growth to 7.4%, according to a CNBC calculation of the official data.
The statistics bureau, however, cautioned: “We must be aware that the adverse effects brought by external environment are increasing, the domestic demands are insufficient.” It called for implementing “more proactive and effective macro policies.”
In December, retail sales jumped 3.7% from a year earlier, exceeding Reuters’ forecast of 3.5%. Industrial output expanded 6.2% from a year earlier, versus expectations of 5.4%, underscoring China’s imbalance between domestic production and weak demand.
The full-year fixed asset investment rose 3.2% in 2024, shy of the projected 3.3% increase in a Reuters poll, as real estate investment drag steepened to a 10.6% drop, compared with the January to November period.
The urban unemployment rate ticked higher to 5.1% in December from 5.0% in the prior month.
Disposable income for urban residents grew 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 striving to boost economic growth and has taken several measures towards this end.
Since late September, Chinese authorities have called for halting the real estate decline, cut interest rates and announced a five-year fiscal package worth 10 trillion yuan ($1.4 trillion) to ease local governments’ financing crisis. 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 pledged “proactive” fiscal measures and a “moderately loose” monetary policy stance for the current year.
Some analysts expect stimulus might start to take effect this year, but it will take longer to see a significant impact.
The real estate slump and uncertainty about future income have weighed on consumer spending and business confidence, adding to deflation concerns.
China’s consumer inflation has remained barely above zero, while wholesale prices fell for a 27th consecutive month in December, official data showed last week.
The government is expected to reveal the official growth targets for 2025 and additional stimulus measures at the annual parliamentary meetings in March.
Economists forecast China will keep its GDP growth target for 2025 at around 5%, if not slightly lower.
Friday’s data comes just days before Donald Trump is set to be inaugurated as the next U.S. president on Jan. 20. Trump has said that soon after taking office, he plans to impose additional tariffs of at least 10% on Chinese goods. He has also appointed some China hawks to key cabinet posts.
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