China achieves 5% GDP growth target in 2024
What's the story
China has reported a 5% growth in its Gross Domestic Product (GDP) for 2024, meeting its official target.
The number is in line with the predictions of Reuters analysts, who had predicted a full-year GDP growth of 4.9%.
The economy performed even better in the fourth quarter of the year, expanding by 5.4%, beating analysts' expectations of a 5% increase.
Economic resilience
China's economy shows stability amid challenges
The National Bureau of Statistics of China described the economic situation as "generally stable with steady progress."
This assessment comes despite the country facing several obstacles in its post-pandemic recovery phase, including a property crisis, high youth unemployment rates, deflation, and aging population.
However, the Chinese government has implemented various strategies throughout 2024 to stimulate economic growth, intensifying these measures in September.
Economic outlook
Domestic demand and deflation concerns
Vishnu Varathan, Nomura's head of macro research for Asia excluding Japan, said the fourth-quarter growth could be due to early signs of strong domestic demand.
However, he also pointed out issues saying, "But the irony is that even as growth hopes may be inspired, its deflation concerns may be far harder to put to bed."
This highlights a disconnect between private sector confidence deficit and state-driven industrial momentum amid heightened geoeconomic uncertainties.
Trade performance
China's trade surplus hits record high amid weak consumer confidence
Despite weak consumer confidence, China's strong exports have bolstered its economic growth.
In 2024, the country's trade surplus hit a record high of CNY 7.06 trillion ($990 billion).
However, this robust export performance could be threatened by incoming US President-elect Donald Trump, who has proposed a 60% tariff on all Chinese imports.
Population decline
China grapples with demographic challenges amid economic growth
China is also facing demographic challenges, as its population declined for the third year in a row in 2024.
The decline is due to increasing living costs prompting youngsters to delay or skip marriage and childbirth while they pursue higher education and careers.
This trend, coupled with an aging population and declining workforce, is putting immense strain on the system.
Despite these challenges, urbanization remains unabated in China with another 10 million people moving to cities last year.