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China’s annual economic growth in 2024 was 5%, reaching the official target and slightly exceeding economists’ forecasts of 4.9%. Despite this, the figure was weaker than the 5.2% growth in 2023, Financial Time reports.
Key drivers and obstacles
According to official data, retail sales in the country grew by 3.5%, reflecting the government’s active efforts to stimulate consumption. At the same time, the real estate sector is showing mixed results, with prices mostly declining in major cities, although new home prices in Shanghai have increased.
However, China is facing demographic challenges, with the country’s population declining by 1.4 million in 2024 for the third consecutive year. Declining birth rates and an ageing workforce are putting additional pressure on the economy.
Labour market and household incomes
The urban unemployment rate decreased to 5.1%, and the number of migrant workers increased to 299.7 million. The average national income per capita increased by 5.1% to 34,707 yuan (USD 4,737).
Market reaction and forecasts
The markets reacted positively to the news of economic growth, with the CSI 300 index rising by 0.4%. However, Goldman Sachs analysts warn that China may not achieve similar growth in 2025 due to macroeconomic challenges and the impact of US tariffs.
Economists also note that the weakening real estate sector and low consumer activity remain significant challenges. “The current Achilles’ heel of the Chinese economy is a really reluctant consumer,” said HSBC’s Frederik Neumann.
The role of incentives in future growth
Beijing is seeking to balance old growth drivers, such as real estate, with new ones, including high-tech industries. According to analysts, additional monetary stimulus is needed to support the economy in the face of internal and external challenges.
Director of the National Bureau of Statistics Kang Yi emphasised the “turbulent” geopolitical environment and the rise of protectionism, which are increasing external pressure on the economy.
