China's GDP growth in 2024 reached the target of 5%

China's economy grew by 5% in 2024 amid rising production, official data showed, while companies increased exports in anticipation of higher US duties and Beijing stepped up stimulus efforts, the Financial Times reports, UNN writes.

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The country's economy "rebounded markedly" in the fourth quarter of 2024, the National Bureau of Statistics said, growing by 5.4% year-on-year and recovering from slower growth in the third quarter.

"Thanks to the package of additional [stimulus] measures, confidence has been effectively strengthened and the economy has recovered markedly," the NBS said in its 2024 GDP data release on Friday.

The annual rate, which slightly exceeded economists' forecasts of 4.9%, fell short of last year's 5.2% growth and was the lowest since 1990, excluding the years affected by the coronavirus pandemic.

The data come as Beijing tries to revive strong growth in a two-speed economy in which strong exports and manufacturing offset weak household sentiment, the newspaper writes.

In September, the central bank announced an easing of monetary policy and support for the stock market. Beijing has also launched a program to refinance local government debt and accelerate stimulus spending aimed at infrastructure and other areas.

But economists fear that China is at risk of entrenched deflation. Producer prices have been in negative territory for more than two years, and consumer prices managed to grow by only 0.1% in December.

NBS Director Kang Yi said at a press conference that 2024 can be "characterized as an extremely turbulent year, marked by intensifying geopolitical conflicts and escalating trade protectionism.

Analysts expect Beijing to set its official growth target for 2025 at around 5 percent for the third year in a row when its parliament convenes in March, although trade is expected to be challenged by new US President Donald Trump's threats to raise tariffs.

"The negative impact of the external environment is deepening. Domestic demand remains insufficient," Kang said, adding that ‘employment and income growth’ is under pressure.

Retail sales grew by 3.5 percent last year, as consumer confidence remained weak amid the ongoing housing market downturn, while industrial production grew by 5.8 percent, driven by strong manufacturing growth.

Residential real estate prices declined in China's largest cities, but new housing prices rose in Shanghai.

Another sign of the country's long-term structural problems is that China's population fell by almost 1.4 million in 2024, the third year in a row, as a slight increase in births compared to the previous year at 9.54 million was offset by 10.93 million deaths.

Although China's economic growth exceeded expectations, the headline figure "hides some hidden vulnerabilities," said Frederick Neumann, chief Asia economist at HSBC.

China's trade surplus with the rest of the world hit a record high of nearly $1 trillion in 2024, thanks to strong export growth as Chinese manufacturers ramped up production to offset sluggish domestic demand, customs data showed last week. Import growth remained more modest.

"The current Achilles' heel of the Chinese economy is a really indecisive consumer," Neumann said. - "All this points to the need for additional incentives, especially the need to support consumer purchasing power.

The press release also emphasizes doubts about China's official data, which some analysts are increasingly concerned do not reflect the hidden weakness of the economy.

"The Chinese government's perceived achievement of its growth target is a Pyrrhic victory that further undermines the credibility of official data and, at best, reflects an economy that still suffers from fragility and a loss of confidence in government policies," said Eswar Prasad, a professor at Cornell University and a senior fellow at the Brookings Institution.

Morgan Stanley analysts said that the higher-than-expected growth in the fourth quarter "may be short-lived" and may weaken from the second quarter.

China sets record trade surplus before Trump's inauguration13.01.25, 10:07 • 22914 views