China's GDP in the fourth quarter increases by 5.4%, exceeding market predictions due to the implementation of stimulus measures.

• Beijing's growth target was met in 2024 as China's economy expanded by 5% year on year, with a surge in the final quarter due to the implementation of stimulus measures.
• China's National Bureau of Statistics reports that fourth-quarter GDP growth exceeded expectations with a 5.4% increase, higher than the 5.0% estimated by Reuters-polled economists.

Beijing's growth target was met in 2024 as China's economy expanded by 5% year on year, with a surge in the final quarter due to the implementation of stimulus measures.

China's National Bureau of Statistics reports that fourth-quarter GDP growth exceeded expectations with a 5.4% increase, higher than the 5.0% estimated by Reuters-polled economists.

The fourth quarter experienced slower growth compared to the previous quarters, with a 4.6% increase in the third quarter, 4.7% in the second quarter, and 5.3% in the first quarter.

The full-year economic expansion in 2023 was lower than the 5.4% growth rate recorded post the pandemic. The statistics bureau revised the 2023 GDP growth to 7.4% in late December, according to a CNBC calculation of the official data.

The bureau warned that the negative effects of external factors are rising, while domestic needs remain inadequate. It urged the implementation of "more active and efficient macro policies."

In December, retail sales increased by 3.7% compared to the previous year, surpassing Reuters' prediction of 3.5%. Meanwhile, industrial output grew by 6.2% year-over-year, but fell short of expectations for a 5.4% increase, indicating China's struggle to balance domestic production with weak demand.

In 2024, the full-year fixed asset investment increased by 3.2%, which was below the projected 3.3% increase as stated in a Reuters poll. Additionally, real estate investment decreased by 10.6% in the full year, compared to the January to November period.

The unemployment rate in cities rose from 5.0% to 5.1% in December.

In 2024, the growth rate for disposable income among urban residents was 4.4%, while rural residents experienced a higher growth rate of 6.3%.

In 2023, the national population decreased by 1.39 million, reaching a total of 1.408 billion individuals.

To promote economic growth, China has implemented various strategies.

Beijing has announced a five-year fiscal package worth 10 trillion yuan ($1.4 trillion) to ease local governments' financing crisis, cut interest rates, and halt the real estate decline. Additionally, the government has expanded a program for consumers to trade-in used cars and home appliances and buy new ones at a discount.

This year, top leaders have committed to implementing "proactive" fiscal measures and adopting a "moderately loose" monetary policy stance.

It may take longer to observe a substantial impact from the stimulus, according to some analysts.

The real estate market's downturn and concerns about future earnings have negatively impacted consumer spending and business optimism, exacerbating deflation fears.

In December, China's consumer inflation was barely above zero, while wholesale prices fell for a 27th consecutive month, according to official data.

Official growth targets for 2025 and additional stimulus measures are anticipated to be unveiled during the annual parliamentary meetings in March by the government.

If not slightly lower, China will maintain its GDP growth target of approximately 5% for 2025, as forecasted by economists.

Before Donald Trump's inauguration on Jan. 20, the data for Friday will be released. Trump has stated that he intends to impose additional tariffs of at least 10% on Chinese goods shortly after taking office. He has also appointed China hawks to key cabinet positions.

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