China, the world’s second-largest economy, ended 2024 with a 5.0% growth rate, right in line with the government’s target and a bit above what analysts had expected (4.9%). The fourth quarter was especially strong, with a 5.4% increase year-on-year, the best since the second quarter of 2023.
This boost can be attributed to a bunch of government stimulus measures starting in September that helped revitalize industrial output and retail sales. In December alone, industrial production jumped by 6.2% year on year—the fastest since April—while retail sales grew by 3.7%, up from November’s 3.0%.
However, not everything is smooth sailing. The unemployment rate nudged up to 5.1% in December. There’s also the looming issue of trade tensions with the United States. President Donald Trump is likely to raise tariffs on Chinese goods, and in response, Chinese authorities plan to increase debt. This move might worsen existing issues like overcapacity and deflationary pressures.
Looking ahead, keeping this growth going will require more policy support and careful handling of external trade relations. Analysts stress the importance of continued fiscal and monetary policies to maintain the current momentum, especially with potential external challenges on the horizon.
