China’s economy expanded 5% in 2024, meeting the official target of “around 5%” growth after stimulus measures introduced late last year appear to be working.
The National Bureau of Statistics announced Friday that the world’s second-largest economy has accomplished its growth goals despite growing challenges both abroad and at home. A property crisis, now in its fourth year, continues to be a drag on growth. and consumer spending is weak as households prefer to hoard cash at a time of economic uncertainties. Globally, it is fighting with the U. S. on everything from advanced technologies to trade.
After authorities introduced in September major stimulus measures, including interest rate cuts, more cash for banks to lend and a $1.4 trillion debt-swap program for local governments, certain economic activities such as industrial production shifted into higher gear. In the fourth quarter of 2024, gross domestic product (GDP) expanded a better-than-expected 5.4%, according to the National Bureau of Statistics. Chinese President Xi Jinping had urged greater efforts to achieve the growth goal.
“China’s Q4 data turned out much stronger than expected, helping the country land nicely on its annual growth target,” Guo Shan, a Shanghai-based partner at research firm Hutong Research, says via WeChat.
For 2025, Guo forecasts that China will continue to set a 5% growth target. Alicia Garcia Herrero, a Hong Kong-based chief Asia Pacific economist at French investment bank Natixis, says via WeChat that growth momentum might be sustained in the first three months of this year. This is partly because exports are expected to be strong as companies try to front-load shipments abroad to avoid new tariffs introduced by the incoming Trump administration.
But uncertainties surround China’s export performance amid rising geopolitical tensions, she says. To support the economy, authorities might introduce more fiscal stimulus measures, including potentially setting aside 1 trillion yuan ($137 billion) to boost social welfare spending and give cash handouts to families with children, according to Hutong Research’s Guo.
“Beijing will likely announce a fiscal deficit around 4%, meaning over 1 trillion yuan more for general public spending,” he says. “Whichever [sector] drags growth will see support.”