China’s economy grew at an annual rate of 5% in 2024, slower than the previous year but in line with Beijing’s target of around 5% growth, boosted by strong exports and recent stimulus measures. The economy grew 5.4% in October-December on a quarterly basis, the government reported on Friday. Exports accelerated as companies and consumers sought to avoid potential tariff hikes on Chinese goods, PTI reported.
The economy grew 5.4% in October-December on a quarterly basis, the government reported on Friday (January 17, 2025).
Exports accelerated as companies and consumers sought to avoid potential tariff hikes on Chinese goods by incoming President Donald Trump. According to a report released by the National Bureau of Statistics on Friday, “the national economy remained generally stable and made steady progress and achieved new achievements in high-quality development.”
It said, “In particular, the implementation of a package of timely incremental policies effectively boosted social confidence and led to a significant improvement in the economy.”
Last year, the manufacturing sector played an important role in growth, with industrial production growing 5.8% over the previous year. Total retail sales of consumer goods grew 3.5% at an annual rate. They were trying to avoid potential tariff hikes.
Manufacturing sector played a big role
According to the National Bureau of Statistics report on Friday, the national economy remained generally stable, with steady progress. New achievements were made in high-quality development. According to the news, it is said that the timely implementation of a package of incremental policies, in particular, effectively boosted social confidence and significantly improved the economy. Last year, the manufacturing sector acted as a strong engine for growth, with industrial production growing 5.8% over a year earlier. Total retail sales of consumer goods grew 3.5% at an annual rate.
China grew at 5.2% annual rate in 2023
Exports grew 7.1% on an annual basis, while imports grew 2.3%. The world’s second-largest economy is grappling with weak consumer spending and resulting deflationary pressures as its recovery from the Covid-19 pandemic faltered and the property sector, once a main driver of business activity, slipped into recession. The Chinese economy grew at a 5.2% annual rate in 2023, and economists have forecast it will slow further in the coming years. China’s population is also aging and declining, adding pressure on growth.
Birth control policies gaining ground
Rising living costs have caused young people to postpone or forgo marriage and childbearing in favor of higher education and careers, increasing the impact of birth control policies that once limited most families to one child. Some economists say the economy is growing at a slower pace than shown in official estimates. Trump, who will be sworn in next week, has vowed to raise US import duties on Chinese goods. This week, the Biden administration imposed further restrictions on exports of advanced semiconductors and technology, as it sought to maintain US leadership on advanced technologies and block China’s access to them.
Exports rose 7.1% on an annual basis, while imports rose 2.3%
The world’s second-largest economy is grappling with weak consumer spending and resulting deflationary pressures, as its recovery from the Covid-19 pandemic slows and the property sector, once a main driver of business activity, slips into recession.
The Chinese economy will grow at a 5.2% annual rate in 2023, and economists forecast it will slow further in the coming years.
China’s population is also aging and shrinking, adding pressure on growth. The government reported on Friday that the population will decline for the third consecutive year in 2024, to 1.408 billion by the end of 2024, down by 1.39 million from last year.
Rising living costs are causing young people to postpone or forgo marriage and childbearing as they pursue higher education and careers, increasing the impact of birth control policies that once limited most families to one child.
Some economists say the economy is growing slower than official projections.
“At a time when most indicators of economic activity and financial markets are in the red, the accurate achievement of the official growth target is highly questionable,” Eswar Prasad, a professor of economics at Cornell University, said in an emailed comment.
“The economy is beset by a combination of weak domestic demand and persistent deflationary pressures, in addition to an unfavorable external environment that could limit exports,” he said.
Trump, who will be sworn in next week, has promised to raise U.S. import tariffs on Chinese goods. This week, the Biden administration imposed further restrictions on exports of advanced semiconductors and technology as it aims to boost U.S. exports of advanced technologies.
The ruling Communist Party has rolled out a slew of stimulus measures, including lowering banks’ reserve requirement ratios, cutting interest rates and drawing billions of dollars from its budget in 2025 to fund construction projects. It has ordered banks to lend to troubled property developers that have become deeply in debt after authorities cracked down on excessive borrowing.
Beijing has also expanded a trade-in scheme for consumer goods and raised the pay of millions of government workers to revive domestic demand.
Some economists say these incremental steps should be accompanied by broader structural reforms that would improve productivity and make the economy less reliant on construction and export manufacturing. In particular, private businesses are wary of increasing investment or hiring after years of policy changes, raising uncertainty about their role in the economy.
Meanwhile, inadequate social protection has led households to save rather than spend, and falling housing prices and weak stock market prices have eroded household wealth, further complicating the problem.
“China needs a strong and multi-pronged policy package to get growth back on track,” Prasad said. Such a package should include substantial and well-targeted monetary and fiscal stimulus, as well as reforms and other measures to boost private sector confidence.”
