Ad Banner
Advertisement by Open Privilege

China reports robust 2024 growth after wobbles prompt stimulus

Image Credits: UnsplashImage Credits: Unsplash
  • China reported 5% GDP growth in 2024, meeting its target through stimulus measures, but questions about data reliability persist.
  • The real estate sector and weak domestic consumption remain significant challenges, despite government efforts to boost the economy.
  • Long-term structural reforms and demographic shifts pose challenges for China's future economic growth, with projections suggesting slower expansion in coming years.

[WORLD] China's economy expanded by 5% in 2024, meeting the government's target and demonstrating resilience amid global uncertainties. This growth came after a series of stimulus measures were implemented to counter economic headwinds, particularly in the real estate sector and domestic consumption.

Economic Performance Highlights

The National Bureau of Statistics (NBS) reported that China's gross domestic product (GDP) grew by 5.4% year-on-year in the fourth quarter of 2024, surpassing analysts' expectations and marking the fastest growth since the second quarter of 20237. This strong finish helped the world's second-largest economy achieve its annual growth target of "around 5%".

Key economic indicators for 2024 include:

GDP growth: 5% year-on-year

Industrial production: 5.8% increase

Retail sales: 3.5% growth

Exports: 7.1% expansion

Imports: 2.3% growth

Stimulus Measures Drive Recovery

The Chinese government implemented a series of stimulus measures throughout 2024 to bolster economic growth and address challenges in various sectors. These initiatives included:

  • Reducing banks' reserve requirement ratios
  • Cutting interest rates
  • Frontloading billions from the 2025 budget for construction projects
  • Ordering banks to lend to struggling property developers
  • Expanding trade-in schemes for consumer goods
  • Raising wages for millions of government workers

These measures were particularly crucial in supporting the real estate sector, which had been a significant drag on economic growth in recent years.

Challenges and Concerns

Despite the positive growth figures, several challenges and concerns persist:

Real Estate Sector: The property market continues to face difficulties, with new home starts and completions declining significantly.

Domestic Consumption: Retail sales growth remained sluggish, indicating persistent caution among consumers.

Deflationary Pressures: Consumer price inflation remained near zero, while producer prices continued to decline.

Youth Unemployment: High unemployment rates among young people continue to be a concern for policymakers.

Data Reliability: Some economists question the accuracy of official growth figures, suggesting that actual growth may be lower than reported.

Global Impact and Trade Relations

China's economic performance has significant implications for the global economy. In 2023, China accounted for approximately 30% of global growth, and its continued expansion is seen as positive for worldwide economic prospects.

However, the threat of new trade tensions with the United States looms on the horizon. President-elect Donald Trump has pledged to increase import duties on Chinese goods, which could potentially impact China's export-driven growth.

Outlook for 2025

Looking ahead to 2025, economists project a slight moderation in growth:

Goldman Sachs forecasts 4.5% growth for 2025

The World Bank projects 4.5% growth for 2025

These projections take into account potential headwinds, including the impact of possible U.S. tariffs and ongoing domestic challenges.

Expert Opinions

Eswar Prasad, an economics professor at Cornell University, commented on the economic situation:

"The precise achievement of the official growth target is highly dubious at a time when most indicators of economic activity and financial markets are flashing red. The economy continues to be beset by a combination of weak domestic demand and persistent deflationary pressures, in addition to a hostile external environment that could limit exports".

Hui Shan, Chief China Economist at Goldman Sachs, noted:

"The choice in front of Chinese policymakers is simple: either to provide a large dose of policy offset or to accept a notably lower headline real GDP growth. We expect them to choose the former".

Structural Reforms and Long-term Goals

While short-term stimulus measures have helped stabilize growth, China's leadership remains focused on long-term structural reforms. The government aims to transition the economy towards a more technology-driven and self-reliant growth model.

This shift towards higher-quality growth may result in slower economic expansion in the coming years. Goldman Sachs Research forecasts real GDP growth to average 3.5% from 2025 to 2035, compared to 9.0% during 2000-2019.

Population Dynamics

China's demographic challenges continue to impact economic growth. The country's population declined for the third consecutive year in 2024, falling by 1.39 million to 1.408 billion. This ongoing demographic shift adds pressure to long-term growth prospects and underscores the need for productivity improvements and economic restructuring.

China's economy demonstrated resilience in 2024, achieving its growth target of 5% despite various challenges. The government's stimulus measures played a crucial role in supporting growth, particularly in the face of real estate sector difficulties and weak domestic consumption.

However, concerns persist about the sustainability of this growth model and the accuracy of official data. As China navigates potential trade tensions and continues its transition towards a more balanced and high-quality growth model, policymakers will need to address structural issues while maintaining economic stability.

The coming years will be critical for China as it seeks to balance short-term growth with long-term economic transformation. The global economy will be watching closely, given China's significant role in driving worldwide economic growth.

Economists both domestically and outside have long regarded China's official economic statistics with suspicion. However, the gap between the figures and the real world has rarely been as obvious as it is right now.

Economists and experts who monitor the second-largest economy in the world say that the discrepancy between China's official figures and alternative indicators of economic activity has grown in recent years.

These observations highlight the ongoing debate about the reliability of China's official economic data and underscore the importance of considering multiple indicators when assessing the country's economic performance.


Ad Banner
Advertisement by Open Privilege

Read More

Technology Malaysia
Image Credits: Unsplash
TechnologyFebruary 28, 2025 at 2:00:00 PM

Urgent Apple update shields devices from critical security flaws

[WORLD] Apple has once again demonstrated its commitment to user protection with the release of crucial updates for its popular devices. The tech...

Relationships Malaysia
Image Credits: Unsplash
RelationshipsFebruary 14, 2025 at 5:30:00 PM

How to assess the health of your relationship

[WORLD] When we think about our romantic relationships, the question often arises: "How's our relationship going?" It’s a simple question, but one that...

Tech Malaysia
Image Credits: Unsplash
TechFebruary 14, 2025 at 1:30:00 PM

How China's DeepSeek could bolster the already thriving data center business

[WORLD] The global data center market has been growing rapidly in recent years, driven by the explosion of data usage, cloud computing, artificial...

Fashion Malaysia
Image Credits: Unsplash
FashionFebruary 14, 2025 at 11:30:00 AM

Global brands struggling as their lustre fades in China

[WORLD] The Chinese beauty market has long been one of the most lucrative for global beauty giants like Estée Lauder and L’Oréal. However,...

Travel Malaysia
Image Credits: Unsplash
TravelFebruary 14, 2025 at 11:30:00 AM

AirAsia named world's best low-cost airline

[WORLD] AirAsia has been named the world’s best low-cost airline by AirlineRatings.com, an Australian aviation safety and product rating agency. This recognition comes...

Relationships Malaysia
Image Credits: Unsplash
RelationshipsFebruary 14, 2025 at 11:30:00 AM

How ear squats boost brain power

[WORLD] When we think of childhood punishments, what typically comes to mind are time-outs, grounding, or perhaps a stern talking-to. But there’s a...

Economy Malaysia
Image Credits: Unsplash
EconomyFebruary 14, 2025 at 11:00:00 AM

Hong Kong stocks eye fifth consecutive winning week amid tariff easing and DeepSeek trade

[WORLD] Hong Kong’s stock market is set to extend its winning streak to a fifth consecutive week, a remarkable achievement given the region's...

In Trend Malaysia
Image Credits: Unsplash
In TrendFebruary 14, 2025 at 10:00:00 AM

Why we don’t say ‘I love you’ in Chinese

[WORLD] The phrase "I love you" carries a deep emotional weight in many cultures around the world. It's a phrase commonly used to...

Retail Malaysia
Image Credits: Unsplash
RetailFebruary 14, 2025 at 9:30:00 AM

How Michelin Star turns into a restaurant's burden

[EUROPE] The Michelin Star is often regarded as the pinnacle of culinary achievement, a prestigious symbol of excellence that can catapult a restaurant...

Tech Malaysia
Image Credits: Unsplash
TechFebruary 14, 2025 at 9:30:00 AM

Apple will reinstate TikTok to the US App Store in response to the Attorney General's request

[UNITED STATES] Apple is set to restore ByteDance-owned TikTok on its U.S. App Store. This decision comes after a directive from U.S. Attorney...

Tech Malaysia
Image Credits: Unsplash
TechFebruary 14, 2025 at 9:30:00 AM

UK explores Anthropic's Claude AI for public services

[EUROPE] the United Kingdom is set to explore the use of Anthropic's advanced AI chatbot, Claude, in various public services. This decision comes...

Finance Malaysia
Image Credits: Open Privilege
FinanceFebruary 14, 2025 at 9:30:00 AM

Ringgit strengthens against US Dollar and ASEAN currencies ahead of GDP data

[MALAYSIA] The Malaysian ringgit has gained ground against the US dollar and other ASEAN currencies as it opens higher in the early hours...

Ad Banner
Advertisement by Open Privilege
Load More
Ad Banner
Advertisement by Open Privilege