Employees on the assembly line of China's First Automobile Manufacturing Plant (FAW) in Hainan province, where Mazda cars are being produced.
China Photo/Getty Images
China's economy will grow by 5% in 2024, achieving the official growth target of “around 5%” after stimulus measures launched late last year appeared to be working.
The world's second-largest economy has achieved its growth targets despite growing challenges at home and abroad, the National Bureau of Statistics announced on Friday. The real estate crisis has entered its fourth year and continues to drag down economic growth. Consumer spending weakened as households preferred to hoard cash in times of economic uncertainty. Globally, it fights the United States on everything from advanced technology to trade.
Some economic activity, such as industrial production, began to accelerate in September after authorities introduced major stimulus measures including cutting interest rates, providing more cash for bank lending and providing a $1.4 trillion debt swap program for local governments. Data from the National Bureau of Statistics show that in the fourth quarter of 2024, gross domestic product (GDP) grew by 5.4%, which was better than expected. Chinese President Xi Jinping urged intensified efforts to achieve growth goals.
“China's fourth-quarter data were stronger than expected, helping China achieve its annual growth target well,” Guo Shan, a Shanghai-based partner at research firm Hutong Research, said via WeChat.
For 2025, Guo predicts that China will continue to set a growth target of 5%. Alicia Garcia Herrero, chief Asia-Pacific economist at French investment bank Natixis in Hong Kong, said via WeChat that the growth momentum in the first three months of this year is likely to continue. That's partly because exports are expected to be strong as companies try to bring forward shipments overseas to avoid new tariffs from the incoming Trump administration.
But she said there was uncertainty about China's export performance due to rising geopolitical tensions. To support the economy, authorities are likely to roll out more fiscal stimulus measures, including possibly allocating 1 trillion yuan ($137 billion) to increase social welfare spending and hand out cash to families with children, Hutong Research's Guo said.
“Beijing is likely to announce a fiscal deficit of about 4%, which means general public spending will increase by more than 1 trillion yuan,” he said. “any [sector] Factors holding back growth will be bolstered.
