China confirmed on Friday that its economy grew by 5 percent in 2024, settling the debate over whether Beijing’s “around 5 percent” growth target would be achieved.
The National Bureau of Statistics also revealed that China‘s GDP grew 5.4 percent during the latest fourth quarter, a 1.6 percent increase year-over-year and the highest growth level of the year.
Manufacturing drove significant growth last year, with industrial output rising 5.8 percent compared to the previous year. Retail sales of consumer goods increased by 3.5 percent, while exports grew by 7.1 percent and imports rose by 2.3 percent.
China’s urban unemployment rate was 5.1 percent in 2024, 0.1 percentage points lower than a year prior; the youth unemployment rate dropped 0.4 percent in December. The average weekly working hours of enterprise employees clocked in at 49 hours, according to the NBS.
Home prices showed signs of stabilization. According to NBS data, new home prices in first-tier cities rose 0.2 percent in December, reversing a downward trend since June 2023. In addition, new home prices rose in 23 medium-to-large-sized cities.
“We expect to see prices bottom out in 2025, though an L-shaped recovery still looks like the most likely scenario,” wrote ING’s chief economist Lynn Song in a memo.
“We continue to see stabilizing property prices as one of the top priorities moving forward, representing 60 to 70 percent of household balance sheets,” Song added.
Online retail continued to outpace overall consumption growth. Sales of consumer goods grew a moderate 3.5 percent year-over-year and reached 487.8 billion renminbi, or $66.5 billion. Online sales rose 7.2 percent year-over-year to 155.2 billion renminbi, or $21.1 billion. For the fourth quarter, sales of consumer goods increased 3.8 percent.
Hospitality sectors continued to outperform discretionary segments such as apparel and jewelry. Sports and recreation sales grew 11.1 percent year-over-year, restaurant sales increased 5.3 percent, and alcohol sales grew 5.7 percent. However, gold and jewelry sales declined 3.1 percent year-over-year, and cosmetics sales contracted 1.1 percent year-over-year. Apparel goods sales inched up 0.3 percent year-over-year.
“The key question is if we can see consumer confidence bottom out and begin a meaningful recovery. Pessimism has grown quite entrenched as of late, and it will take a lot of effort to break out of the doldrums,” Song wrote in the report.
“We think that this process must start with stabilization of asset prices and an exit of the contractionary and cost-cutting mindset that has set in — easier said than done,” Song added.
