China's economy successfully met its official growth target in 2024. This achievement was driven by several late-year stimulus initiatives that invigorated both industrial production and consumer spending, alongside a boost in exports in anticipation of potential tariff hikes by the U.S. government.
The National Bureau of Statistics reported that the Gross Domestic Product (GDP) grew by 5.4% year-on-year in the fourth quarter, surpassing the 4.6% growth experienced in the third quarter and exceeding economists' predictions of 5.0%. On a quarter-on-quarter basis, the GDP rose by 1.6%, in line with forecasts and up from a revised 1.3% in the previous period.
Throughout 2024, the economy expanded by 5.0%, aligning with the official growth target—a target China has rarely missed in the past. However, the statistics bureau warned of increasing adverse effects from the external environment and insufficient domestic demand, urging authorities to adopt more proactive and effective macroeconomic policies. According to Zichun Huang, an economist at Capital Economics, although increased fiscal spending should support near-term activity, it may not avert a slowdown in growth by year-end.
Huang also pointed out that with Donald Trump likely to implement his tariff threats soon and ongoing structural imbalances impacting the economy, growth is expected to weaken throughout 2025.
At the Two Sessions in March, policymakers are projected to set a growth target of "around 5 percent" or potentially a target of "above 4.5 percent," as noted by ING economist Lynn Song. Such targets, despite potential tariff and sanction challenges, suggest Beijing's readiness to enhance fiscal support and continue monetary policy easing—a move likely interpreted by markets as a demonstration of confidence.
Data indicated that industrial production increased by 6.2% in December, surpassing expectations of 5.4% growth. Retail sales rose by 3.7% annually, exceeding expectations of 3.5% and improving from 3.0% in the prior month.
Fixed asset investment increased by 3.2% year-on-year in 2024, slightly below the anticipated 3.3%. However, property investment dropped by 10.6% compared to the previous year. Furthermore, the unemployment rate slightly increased to 5.1% in December from 5.0% in November, against expectations of remaining stable.
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