China closed 2024 with strong economic performance, surpassing expectations in both industrial production and retail sales. This highlights the resilience of the world’s second-largest economy despite ongoing global challenges.
Industrial Production: Leading Sectors
In December, 2024 China’s industrial production grew by 6.2% year-on-year (YoY), exceeding forecasts of 5.4%. The average annual growth reached 5.8%, also beating expectations.
Key contributors to this growth include:
• Machinery Manufacturing: up by 9.2%.
• Automobile Production: a remarkable 17.7% increase.
• Computers and Communication Equipment: growth of 8.7%.
• Non-ferrous Metals: a rise of 9.7%.
The chemical industry (+9.4%) and textiles (+4.6%) also posted solid gains. Out of 41 key industries, 34 showed positive results, underlining the broad-based nature of growth.
Despite persistent challenges in global supply chains, manufacturing remains a key driver of China’s economic expansion.
Retail Sales: Positive Dynamics
Retail sales in December increased by 3.7% YoY, slightly exceeding the forecast of 3.5%. Categories that stood out include:
• Household Appliances: a surge of 39.3%, compared to 22.2% in November.
• Food Products: steady growth of 9.9%.
• Clothing: returned to positive territory (+0.8%) for the first time in six months, after a -4.5% decline in November.
However, demand for jewelry (-1.0%) and gasoline (-2.8%) remained subdued, though the pace of decline has slowed.
GDP Growth: Progress and Risks
China’s GDP grew by 5.0% in 2024 fully aligning with the targets set by the Communist Party of China. The fourth quarter was particularly strong:
• Annual growth reached 5.4% YoY, compared to 4.6% in Q3.
• Quarterly growth accelerated to 1.6%, up from 1.3% in the previous quarter.
These figures reflect a rebound in domestic demand and industrial activity.
However, several risks remain on the horizon:
• Potential new tariffs from the United States.
• Challenges in the real estate market.
• Weak consumer demand in certain sectors.
2025 Projections and Government Plans
International organizations forecast China’s GDP growth for 2025 to range between 4% and 4.5%. However, the Chinese government has set a higher target of 5%.
To achieve this goal, the government plans significant stimulus measures:
• Issuance of bonds worth 3 trillion yuan (compared to 1 trillion yuan in 2024).
• Increased subsidies to boost domestic demand.
• Support measures for banks and the stock market.
China ended 2024 with impressive results, reaffirming its economic resilience during uncertain times. However, addressing existing challenges will require strategic actions and proactive measures from the government. The planned stimulus initiatives for 2025 are expected to play a critical role in sustaining economic growth.
Prepared by: Kuanysh Beisengazin, Head of the National Bureau of Economic Research, specifically for the portal www.economykz.org
