China’s economy grew 5% in 2024, in line with government targets, but at the slowest pace since 1990 outside of the Covid pandemic, according to official data.
Growth accelerated throughout the year, expanding 5.4% in the final quarter, up from 4.6% in the third quarter, according to the National Bureau of Statistics in Beijing.
The office reported “steady progress in a context of stability,” but highlighted a “complicated and severe environment with increasing external pressures and internal difficulties.”
The statistics office said the economy had “remarkably recovered” by the end of 2024, after the government announced a series of stimulus measures. These included interest rate reductions, as well as a consumer goods trade-in program and tax incentives for the purchase of real estate.
Over the whole of 2024, industrial production increased by 5.8%, helped by strong performance in the manufacturing sector, but retail sales increased by only 3.5%, despite policies aimed at to stimulate domestic demand.
Beijing has attempted to rebalance its growth, moving from heavy reliance on exports to domestic consumption. However, the housing downturn and the after-effects of the Covid pandemic appear to have continued to weigh on confidence.
Lynn Song, China economist at ING, said: “The key question is whether we can see consumer confidence bottom out and begin a meaningful recovery. Pessimism has become entrenched in recent times and it will take a lot of effort to get out of the doldrums.”
Some commentators have expressed concerns about the accuracy of Chinese economic data, given the political nature of how the statistics are presented.
China is expected to be hardest hit by the tariffs threatened by Donald Trump. The new US president, who will be inaugurated on Monday, has suggested he could impose a blanket 60% tax on all Chinese imports.
Some U.S. companies have stepped up imports from China in recent months, aiming to beat tariffs — although it’s unclear whether Trump’s plans will be implemented immediately.
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Sam Jochim, economist at EFG Asset Management, said: “Export growth was strong in the fourth quarter (Q4), reflecting an anticipated concentration of orders from the United States in anticipation of Trump’s tariffs.
“Manufacturing production has been accompanied by an increase, but it is clear that, all things being equal, these growth engines will struggle to maintain this dynamic in 2025.”
