Chinese economic growth meets 2024 target in fourth quarter

(Sharecast News) - China's economy exceeded expectations in the fourth quarter of 2024, expanding by 5.4% as a wave of government stimulus measures drove activity. The stronger-than-expected performance brought full-year GDP growth to 5.0%, aligning with Beijing's target of "around 5%", according to data released by the National Bureau of Statistics on Friday.

The fourth-quarter surge marked an improvement from 4.6% growth in the prior quarter, and helped offset weaker results earlier in the year.

However, 2024's growth rate was slower than the 5.4% recorded in 2023.

Notably, the 2023 GDP growth was revised upward to 7.4% in December, reflecting adjustments to preliminary figures.

Retail sales rose 3.7% year-on-year in December, surpassing expectations of 3.5%, while industrial output grew by 6.2%, exceeding forecasts of 5.4%.

The figures highlighted ongoing imbalances, with production outpacing demand amid subdued consumer sentiment.

Fixed asset investment meanwhile increased by 3.2% for the year, slightly below the projected 3.3%, as a steep 10.6% decline in real estate investment weighed on broader capital spending.

Labour market conditions softened slightly, with the urban unemployment rate rising to 5.1% in December from 5.0% the previous month.

Meanwhile, disposable income for urban residents grew by 4.4% in 2024, trailing overall economic growth, while rural residents saw a stronger income increase of 6.3%.

Stefan Koopman, senior macro strategist for RaboResearch, noted that growth for 2025 was targeted at 5% again.

"Of course, we all pretend to forecast it as if it may not happen, but in China, GDP is an input, not an output," he said.

"The global consensus among policymakers and analysts is that China will have to pivot from its export-dependent, investment-heavy growth model toward one centered on domestic consumption.

"Yet, this structural shift remains constrained by the ideological preferences of Chinese leadership, which continues to prioritize state-driven economic strategies."

Koopman added that there were still, however, some indications of rebalancing.

"Money supply growth appears to be stabilizing, and after three consecutive years of contraction, the real estate sector may have bottomed.

"However, policy efforts to bolster consumer spending tend to underwhelm, contributing to uncertainty on how that 5% target will actually be achieved."

Reporting by Josh White for Sharecast.com.