China’s economy grew by 5% in 2024, meeting its official target and surpassing market expectations. The National Bureau of Statistics reported a robust 5.4% growth in the fourth quarter, outpacing the 4.6% expansion in the third quarter.
This growth comes despite persistent challenges in the property sector, weak consumer spending, and looming trade tensions with the United States. The Chinese government implemented a series of stimulus measures throughout 2024.
In September, they intensified efforts to boost economic recovery. These initiatives included interest rate cuts, a substantial five-year fiscal plan, and expanded consumer subsidy programs.
The measures appear to have had some positive effects. In December, retail sales rose by 3.7% year-on-year, and industrial output grew by 6.2%. However, concerns remain about the sustainability of this growth.
Rhodium Group estimates that China’s actual GDP growth in 2024 may have been between 2.4% and 2.8%, significantly lower than official figures. The discrepancy highlights ongoing debates about the accuracy of China’s economic data.
Looking ahead to 2025, China faces both opportunities and challenges. The government has pledged “proactive” fiscal policies and a “moderately loose” monetary approach.
Economists project growth rates between 3% and 5% for the coming year. However, potential new tariffs from the incoming Trump administration in the U.S. could pose significant risks. This may affect China’s export-driven growth strategy.
As China navigates these economic headwinds, its performance will continue to have far-reaching implications for global markets, trade relationships, and economic policies worldwide.
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