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China’s economy experienced one of it’s slowest rates of growth in decades, with a growth rate of 5% in 2024. This figure was slightly above the forecasted 4.9% growth rate but still fell short of the 5.2% growth rate recorded in 2023

The National Bureau of Statistics (NBS) in Beijing attributed this slow growth to a “complicated and severe environment with increasing external pressures and internal difficulties.”.

Beijing has introduced aggressive support measures in recent months to reignite the economy, which has been suffering from a prolonged property market debt crisis and sluggish consumer spending. However, calls for further policy help have emerged following the release of the official growth figures.

The growth rate of 5% took place despite a challenging environment, with retail sales rising by only 3.5%—a significant decline from the 7.2% growth seen in 2023. Industrial output, on the other hand, increased by 5.8% from 4.6% the previous year.

The data provided “mixed messages,” according to Zhiwei Zhang, president of Pinpoint Asset Management. “Beijing’s recent policy shift has helped the economy to stabilise in (the fourth quarter), but it requires large and persistent policy stimulus to boost economic momentum and sustain the recovery,” he said.

Zichun Huang, a China economist at Capital Economics, expressed a more optimistic view, saying that she expected growth to “continue accelerating in the coming months.”. “The government’s property support measures seem to be providing some relief, with the pace of house price falls slowing and new home sales showing some recovery,” she said.

The GDP growth rate is the lowest recorded by China since 1990, excluding the financially tumultuous years of the Covid-19 pandemic. Analysts surveyed by AFP estimated that growth could fall to 4.4% in 2025 and even drop below 4% the following year.

China has so far failed to rebound from the pandemic, with domestic spending mired in a slump and indebted local governments dragging on growth. In a rare bright spot, official data showed that exports reached a historic high last year.

However, gathering storm clouds over China’s massive trade surplus mean Beijing may not be able to count on overseas shipments to boost an otherwise lacklustre economy. Donald Trump, who will begin his second term next week, has promised to unleash heavy trade sanctions on China.

NBS data also showed that output from thermal plants—fuelled primarily by coal—increased 1.5% year-on-year in 2024. China’s production of fossil fuels, including coal and natural gas, also jumped, casting doubt on hopes that the country’s emissions began to decline last year.

Beijing has introduced a series of measures in recent months to bolster the economy, including cutting key interest rates, easing local government debt, and expanding subsidy programs for household goods.

Observers were closely watching the data release for signs that these measures had succeeded in reviving activity. 

China’s central bank has hinted that it will cut rates further in 2025, part of a key shift characterised by a “moderately loose” monetary policy stance.

However, analysts warn that more efforts are needed to boost domestic consumption as the outlook for Chinese exports becomes more uncertain. 

“Monetary policy support alone is unlikely to right the economy,” Harry Murphy Cruise of Moody’s Analytics told AFP. 

“China is suffering from a crisis of confidence, not one of credit,” he wrote.

Ting Lu, Chief China Economist at Nomura, wrote that Beijing, “encouraged” by its achievement of last year’s goal, was unlikely to change its annual growth goal of around 5% for the year ahead.

“We are concerned that Beijing may not ramp up its efforts enough in carrying out the hard work after seeing some short-term green shoots,” Lu wrote. 

“Despite today’s sanguine data, now is not the time for Beijing to rest on its laurels.

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