By Francesca Hangeior.
China recorded one of its slowest rates of economic growth in decades last year, data showed Friday, as leaders nervously eye a potential trade standoff with incoming US president Donald Trump.
Beijing has in recent months announced its most aggressive support measures in years in a bid to reignite an economy that has suffered on multiple fronts, including a prolonged property market debt crisis and sluggish consumer spending.
But, the economy grew five per cent last year, official data from Beijing’s National Bureau of Statistics showed Friday, slightly above the 4.9 per cent forecast in an AFP survey of analysts.
Still, the figure was lower than the 5.2 per cent recorded in 2023.
The growth took place in the face of a “complicated and severe environment with increasing external pressures and internal difficulties”, the NBS said.
The economy was still facing “difficulties and challenges”, officials admitted.
Retail sales, a key gauge of consumer sentiment, rose 3.5 per cent — a major slump from the 7.2 per cent growth seen in 2023 — though industrial output increased 5.8 per cent, from 4.6 per cent the previous year.
However, the 5.4 per cent jump in economic growth seen in the final four months far outpaced the five per cent forecast in a Bloomberg survey and was much better than the same period in 2023.
The data provided “mixed messages”, Zhiwei Zhang, president of Pinpoint Asset Management, said.
Beijing’s recent policy shift had “helped the economy to stabilise in (the fourth quarter), but it requires large and persistent policy stimulus to boost economic momentum and sustain the recovery”, he said.
Zichun Huang, China economist at Capital Economics, said she expected growth to “continue accelerating in the coming months”.
“The government’s property support measures seem to be providing some relief, with the pace of house price falls slowing and new home sales showing some recovery,” she said.
The GDP growth rate is the lowest recorded by China since 1990, excluding the financially tumultuous years of the Covid-19 pandemic.
And the analysts surveyed by AFP estimated growth could fall to just 4.4 per cent in 2025, and even drop below four per cent the following year.
China has so far failed to rebound from the pandemic, with domestic spending mired in a slump and indebted local governments dragging on growth.
In a rare bright spot, official data showed earlier this week that exports reached a historic high last year.
But gathering storm clouds over the country’s massive trade surplus mean Beijing may not be able to count on overseas shipments to boost an otherwise lacklustre economy.
Trump, who will begin his second term next week, has promised to unleash heavy sanctions on China.
“We still expect growth to slow for 2025 as a whole, with Trump likely to follow through on his tariff threats soon and persistent structural imbalances still weighing on the economy,” Huang said.