Railway builders erect a box girder at the standard project site in front of the Huning section of the Shanghai-Nanjing-Hefei high-speed railway in Suzhou, Jiangsu province, China, 10 January 2025.
Cost photo | Nuphoto | Getty Images
Chinese economic activity accelerated more than expected in the last three months of 2024, as stimulus measures took effect, allowing Beijing to meet its annual growth target.
China’s gross domestic product increased by 5.4% in the fourth quartertopping estimates from economists polled by Reuters of 5.0 percent growth and surpassing 4.6 percent in the third quarter, 4.7 percent in the second quarter and 5.3 percent in the first quarter.
This last quarter’s sprint helped bring China’s full-year GDP growth to 5.0% in 2024, according to the Chinese National Bureau of Statistics on Friday, in line with the official target of “around 5 %”.
“The change in policy direction in September last year helped the economy stabilize in the fourth quarter, but it requires significant and persistent policy stimulus to boost economic momentum and support the recovery,” he said. said Zhiwei Zhang, president and chief economist of Pinpoint Asset Management. a remark.
The statistics office warned in its statement that “the negative effects caused by the external environment are increasing and domestic demands are insufficient.” He calls for the implementation of “more proactive and effective macroeconomic policies”.
Mainland China’s blue-chip CSI 300 index reversed trend to climb 0.15%, following the upbeat data. China’s offshore yuan strengthened slightly to 7.3398 per U.S. dollar, while the benchmark 10-year government bond yield fell 2 basis points to 1.638, LSEG data showed.
Last year’s growth was slower than the 5.4% rise recorded in 2023, after the pandemic. As part of a annual revision of preliminary figuresthe statistics office revised GDP growth for 2023 to 7.4% at the end of December, according to a CNBC calculation based on official data.
In December, retail sales jumped 3.7% from a year earlier, beating Reuters’ forecast of 3.5%. Industrial production increased by 6.2% compared to the previous year, compared to a forecast of 5.4%, highlighting China’s imbalance between domestic production and weak demand.
THE investment in fixed assets for the whole year increased by 3.2% in 2024, below the projected increase of 3.3% according to a Reuters poll, according to The brake on real estate investment has increased down 10.6% compared to the January-November period.
The urban unemployment rate increased to 5.1% in December from 5.0% the previous month.
The disposable income of urban residents increased by 4.4%, a slower pace than overall economic growth, while that of rural residents increased by 6.3% in 2024.
Boost for recovery
China is striving to boost economic growth and has taken several measures to this end.
Since late September, Chinese authorities have called for halting the decline in real estate, cutting interest rates and announcing a five-year budget plan worth 10 trillion yuan ($1.4 trillion). dollars) to alleviate the financial crisis of local governments. Beijing also expanded a program allowing consumers to trade in used cars and appliances and buy new ones at a discount.
“They are banking on a substantial influx of stimulus measures and reforms to revive the country’s economy in 2025, reinvigorating domestic demand and warding off a disinflationary threat,” said Bruce Pang, senior researcher at the National Institution for Finance and development.
Top leaders pledged to take “proactive” fiscal measures and adopt a “moderately loose” monetary policy for the current year.
Some analysts expect the stimulus measures to start taking effect this year, but it will take longer to see a significant impact.
The housing crisis and uncertainty over future incomes have weighed on consumer spending and business confidence, reinforcing fears of deflation.
China’s consumer inflation remained barely above zero, while wholesale prices fell for the 27th consecutive month in December, according to official data released last week.
There is hope that the CPI will “increase moderately” in 2025, statistics bureau spokesperson Fu Linghui told reporters in Mandarin, translated by CNBC.
Kang warned that in 2025, “the adverse impact of external factors may worsen.” He said real estate’s drag on growth had reduced, pointing to new growth drivers such as digital technology. He reiterated that Beijing’s priority this year was to boost consumption.
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 keep its 2025 GDP growth target at around 5%, or even slightly below.
Friday’s data comes just days before Donald Trump’s inauguration as the next US president on January 20. Trump said that soon after taking office, he planned to impose additional tariffs of at least 10% on Chinese goods. He also appointed China hawks to key cabinet positions.
The statistics bureau reported on Friday that the national population fell to 1.408 billion in 2024, a drop of 1.39 million from 2023. It decreased by 2.08 million people in 2023 from the year previous.
