China Economic Growth Hits Target On Stimulus

(RTTNews) - China's economy achieved its official growth target in 2024 as series of stimulus measures late last year revived industrial production and spending, and exports increased ahead of potential tariff hikes by the US administration.

Gross domestic product expanded 5.4 percent on year in the fourth quarter, faster than the 4.6 percent growth in the third quarter, the National Bureau of Statistics reported. The rate exceeded economists' forecast of 5.0 percent.

On a quarter-on-quarter basis, GDP rose 1.6 percent, matching forecasts and up from revised 1.3 percent in the preceding period.

For the whole year of 2024, the economy expanded 5.0 percent, in line with the official growth target. China has rarely missed its growth targets in the past. Nonetheless, the statistics bureau cautioned that the adverse effects brought by external environment are increasing and the domestic demand are insufficient. The office urged authorities to implement more proactive and effective macro policies. Although increased fiscal spending should continue to provide a near-term prop to activity, this won't prevent growth from slowing again by the end of this year, Capital Economics economist Zichun Huang said.

The economist noted that with Donald Trump likely to follow through on his tariff threats soon and persistent structural imbalances still weighing on the economy, the growth will weaken in 2025 as a whole.

At the upcoming Two Sessions in March, policymakers are likely to set a growth target of "around 5 percent" again or at the least a target of "above 4.5 percent", ING economist Lynn Song said.

The economist said the setting of such a growth target despite likely headwinds from tariffs and sanctions would imply that Beijing will implement stronger fiscal policy support as well as continue monetary policy easing and would likely be seen by markets as a signal of confidence.

Data showed that industrial production climbed 6.2 percent in December, while it was expected to log a steady growth of 5.4 percent.

Retail sales improved an annual 3.7 percent, again topping expectations for 3.5 percent and up from 3.0 percent in the previous month.

Fixed asset investment was higher by 3.2 percent on year in 2024, shy of expectations for 3.3 percent. In 2024, property investment was down 10.6 percent from the last year.

The jobless rate rose slightly to 5.1 percent in December from 5.0 percent in November. The rate was seen unchanged from November.