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China's economy grew by 5 percent last year on the back of rising manufacturing, as companies loaded on exports early in anticipation of higher US tariffs and as Beijing steps up stimulus efforts, official data showed.
the economy The economy “recovered significantly” in the fourth quarter of 2024, growing by 5.4 percent year-on-year and rebounding from a growth slowdown in the third quarter, the National Bureau of Statistics said.
“With a package of additional (stimulus) policies. . . Confidence has effectively been boosted and the economy has rebounded significantly, the National Bureau of Statistics said in its 2024 GDP data release on Friday.
This annual figure, which slightly exceeded economists' expectations of 4.9 percent, came after last year's growth of 5.2 percent and was the lowest since 1990, except for years distorted by the Corona virus pandemic.
The data comes as Beijing tries to revive strong growth in a two-speed economy, with strong exports and manufacturing offsetting weak household sentiment.
In September, the central bank announced monetary easing and support for the stock market. Beijing has too I launched a program To refinance local government debt and accelerate stimulus spending targeting infrastructure and other areas.
But economists worry that China is at risk of entrenched deflation. Producer prices have been in negative territory for more than two years, and consumer prices managed to grow just 0.1 percent in December.
The year 2024 “can be described as very turbulent, characterized by intensified geopolitical conflicts and rising trade protectionism,” Kang Yi, director of the National Bureau of Statistics, said at a press conference.
Analysts expect Beijing to set its official 2025 growth target at around 5 percent for the third year in a row when its parliament meets in March, although trade remains in the balance. Expected to face challenges This is in light of threats from the next US President, Donald Trump, to impose higher customs duties.
“The negative effects of the external environment are deepening. At the domestic level, demand is still insufficient,” Kang said, adding that “employment and income growth” are under pressure.
Retail sales grew 3.5 percent last year as consumer confidence remained weak amid a prolonged decline in the housing market, while industrial production rose 5.8 percent thanks to strong growth in the manufacturing sector.
Residential property prices fell in China's largest cities, but new home prices rose in Shanghai.
In another sign of the long-term structural challenges facing the country, China's population shrank by about 1.4 million in 2024, the third straight year of decline, as the slight increase in births from the previous year to 9.54 million outweighed 10.93 million deaths.
Frederic Neumann, chief Asia economist at HSBC, said that while China's economic growth beat expectations, the headline figure “hides some fundamental weaknesses.”
“The pick-up in growth was actually driven by industrial production, indicating support from front-loading of exports in anticipation of restrictions on US imports,” Newman said. “This will inevitably lead to retaliation when restrictions on US imports begin to take effect.”
China's trade surplus with the rest of the world has reached a level Record nearly $1 trillion In 2024, customs figures showed last week, thanks to strong export growth as Chinese manufacturers ramp up production to offset slowing domestic demand. Import growth remained more modest.
“The current weak point in the Chinese economy is actually the reluctant consumer,” Newman added. “All of this points to the need for further stimulus, especially the need to support consumers’ purchasing power.”
The statement also confirmed doubts about Chinese official data, which some analysts increasingly fear do not reflect the underlying weakness in the economy.
“The Chinese government’s apparent achievement of its growth target is a Pyrrhic victory that erodes credibility in official statements and, at best, reflects an economy that continues to suffer from underlying fragility and a loss of confidence in government policymaking,” said Eswar Prasad, a professor at Cornell University. . University and senior fellow at the Brookings Institution.
Analysts at Morgan Stanley said that better-than-expected growth in the fourth quarter “may be short-lived” and could decline from the second quarter due to export front-loading and insufficient stimulus measures.
“We believe that better data has likely reduced Beijing's sense of urgency, and policy may continue to lag on the housing and welfare front,” they wrote in a note.
China's CSI 300 index of major mainland-listed companies rose 0.5 percent in morning trade after the data was released, after opening lower earlier in the day.
The index is still down about 14 percent from the peak it reached on October 8, when stimulus policy announcements led stocks to rise.
(Additional reporting by William Sandlund and Haoxiang Kuo in Hong Kong, William Langley in Guangzhou and Wenjie Ding in Beijing)
