China's economy exceeded expectations in the fourth quarter, achieving a 5.4% growth rate, as reported by the National Bureau of Statistics. This growth marks a significant upswing from earlier quarters in 2024, reflecting the country's ongoing efforts to bolster economic activity through various stimulus measures. Economists predict that China will maintain its GDP growth target for 2025 at around 5%, although it may slightly dip below this benchmark.
In 2024, China's economy expanded by 5% on a year-on-year basis, showcasing resilience in the face of global economic challenges. However, this figure represents a decline from the previous year's post-pandemic growth rate of 5.4%. The country's industrial output surpassed expectations, increasing by 6.2% compared to the anticipated 5.4% rise. Despite these positive indicators, China's urban unemployment rate edged up to 5.1% in December, slightly higher than the previous month's 5.0%.
China's consumer inflation hovered just above zero, while wholesale prices continued their downward trajectory for the 27th consecutive month in December. These figures underscore the delicate balance China faces as it seeks to stimulate growth while managing inflationary pressures. The full-year fixed asset investment rose by 3.2% in 2024, falling short of a projected 3.3% increase according to a Reuters poll. Meanwhile, real estate investment experienced a significant decline, dropping by 10.6% compared to the January to November period.
The retail sector provided some positive news, with sales jumping by 3.7% in December compared to the previous year, exceeding Reuters' forecast of 3.5%. Disposable income also saw growth, with urban residents experiencing a 4.4% increase and rural residents enjoying a more substantial 6.3% rise during 2024.
China's population dynamics continue to pose challenges, as the national population decreased by 1.39 million in 2023, bringing the total to 1.408 billion people. This demographic shift highlights potential long-term implications for the labor market and economic growth.
In response to these challenges, top Chinese leaders have committed to "proactive" fiscal measures and a "moderately loose" monetary policy stance for the current year. The government plans to announce official growth targets for 2025 and additional stimulus measures during the annual parliamentary meetings in March.
"We must be aware that the adverse effects brought by external environment are increasing, the domestic demands are insufficient." – China's statistics bureau
This statement from China's statistics bureau emphasizes the complexities faced by the nation as it navigates both internal and external economic pressures.