China: GDP up 5% in 2024, one of the lowest rates

China announced on Friday a 5% increase in its economic growth in 2024, its lowest rate in three decades excluding the Covid period, a few days before a new term in the White House of Donald Trump, who brandishes the threat of a trade war.

Beijing had set a target of “around 5%” growth after a 5.2% increase in its gross domestic product (GDP) in 2023, in a context of persistent crisis in the real estate sector, sluggish domestic consumption and trade tensions with the United States and the European Union.

In 2024, Chinese GDP reached 134,908 billion yuan (16,766 billion francs), according to official estimates from the National Bureau of Statistics (NBS).

Despite a “complicated environment” with “growing external pressures and internal difficulties”, the objectives were “successfully achieved”, underlines the BNS in a document.

Real estate crisis

Eminently political and subject to doubt, the official GDP figure nevertheless remains highly scrutinized, given the weight of the country in the world economy. A group of economists interviewed by AFP had anticipated a slightly lower growth rate (4.9%).

But the final figure is “often subject to strategic adjustments to reflect internal objectives,” François Chimits, economist at the Mercator Institute for China Studies, told AFP at the start of the week.

China is struggling to recover from a serious real estate crisis which is weighing on consumer morale and the finances of local authorities. Beijing increased support measures last year, the most massive in recent years, to encourage millions of consumers to spend.

Exports under threat

A rare improvement in this dark picture, in 2024, the Asian giant’s exports reached a record level of around 3,190 billion francs, up 7.1% over one year, according to official data published Monday.

Conversely, retail sales recorded a clear slowdown, increasing by 3.5% last year compared to an increase of 7.2% in 2023, a sign of consumption under pressure.

These figures send a “mixed” message, said Zhiwei Zhang, chief economist at Pinpoint Asset Management, in a note. “The change of political course last September allowed the economy to stabilize in the fourth quarter,” estimates the expert, but “the unemployment rate exceeded 5%.”

Clouds are also gathering over foreign trade, the engine of economic growth, suspended from the high customs duties promised by US President-elect Donald Trump.

Consumer support

“We must be aware that adverse effects due to the external environment are increasing, domestic demand is insufficient, some enterprises are encountering difficulties in production and operation, and the economy continues to face obstacles and challenges,” acknowledged the BNS on Friday.

Beijing has promised to further relax its budgetary policy in 2025 and to continue its measures to support consumption, such as the recent extension of subsidies allowing households to replace their products, particularly household appliances.

In recent weeks, the Chinese Central Bank has indicated that it is considering further cuts in its key rates in 2025. But according to analysts, other efforts will be necessary to boost consumption, especially given the more uncertain outlook for foreign trade.

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