China’s GDP growth hits 5% target for 2024

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China’s economy grew 5 percent last year on the back of rising manufacturing, official data showed, as companies pushed exports forward in anticipation of higher U.S. tariffs and as Beijing stepped up stimulus efforts.

D the economy “Recovering significantly” in the fourth quarter of 2024, the Bureau of National Statistics said, growing by 5.4 percent year-on-year and recovering from slower growth in the third quarter.

With a growing package [stimulus] policy. . Confidence has effectively strengthened and the economy has recovered significantly,” the NBS said in its 2024 GDP data release on Friday.

The annual figure, which slightly beat economists’ forecasts of 4.9 percent, was behind last year’s 5.2 percent growth and was the lowest since 1990, excluding years marred by the coronavirus pandemic.

The data comes as Beijing tries to revive strong growth in a two-speed economy, where strong exports and manufacturing are offsetting weak household sentiment.

In September, the central bank announced monetary easing and support for the stock market. Beijing did too launched a program Accelerate local government debt refinancing and stimulus spending targeting infrastructure and other sectors.

But economists worry that China is at risk of entrenched inflation. Producer prices have been in negative territory for more than two years, and consumer prices rose just 0.1 percent in December.

NBS director Kang Yi told a press conference that 2024 “can be described as extremely turbulent, marked by intense geopolitical conflicts and increased trade protectionism”.

Analysts expect Beijing to set its official growth target for 2025 at around 5 percent for a third consecutive year when its rubber-stamp parliament meets in March, although trade Challenges are expected In the wake of US President Donald Trump’s threat of high tariffs.

“The adverse effects of the external environment are deepening. Domestically, insufficient demand remains,” Kang said, adding that “employment and income growth” were under pressure.

Retail sales rose 3.5 percent last year as consumer confidence weakened amid a prolonged housing slump, while industrial production rose 5.8 percent on strong growth in manufacturing.

Residential property prices fell in China’s biggest cities, but new home prices rose in Shanghai.

In another sign of the country’s long-term structural challenges, China’s population is expected to decline by about 1.4 million in 2024, the third straight year of decline, as births rose slightly from the previous year to 9.54 million, outpacing 10.93 million deaths.

Frederic Newman, HSBC’s chief Asia economist, said while China’s economic growth beat expectations, the headline figure “masks some underlying weaknesses”.

“The increase in growth was really driven by industrial production, indicating support from the front-loading of exports in anticipation of US import restrictions,” Newman said. “This will inevitably lead to a retaliation as US import sanctions begin to bite.”

China’s trade surplus with the rest of the world has reached The record is almost $1tn in 2024, customs figures showed last week, thanks to strong export growth as Chinese manufacturers ramped up output to meet sluggish domestic demand. Import growth was more modest.

“The current Achilles heel of the Chinese economy is really the hesitant consumer,” Newman added. “All of this points to the need for more stimulus, especially the need to support consumer spending.”

The release also cast doubt on China’s official data, which some analysts increasingly worry do not reflect underlying weakness in the economy.

“The Chinese government’s apparent achievement of its growth targets is a pyrrhic victory that further erodes the credibility of government data and, above all, reflects an economy still beset by underlying fragility and a loss of confidence in government policymaking,” said Cornell professor Eshwar Prasad. University and Senior Fellow at the Brookings Institution.

Analysts at Morgan Stanley said better-than-expected growth in the fourth quarter “may be short-lived”, and exports could be softer than the second quarter due to front-loading and insufficient stimulus measures.

“We think the good data has likely reduced Beijing’s sense of urgency, and policies on the housing and social welfare front are likely to continue,” they wrote in a note.

China’s CSI 300 index of mainland-listed blue-chip companies rose 0.5 percent in morning trade after the data was released, after opening lower earlier in the day.

The benchmark is still about 14 percent below its Oct. 8 peak, when stimulus policy announcements spurred a stock rally.