China’s economy ended 2024 stronger-than-expected. Its GDP expanded by 5.4% in the final quarter of 2024, thereby taking the full year growth to 5%. As Kavan Choksi mentions, government stabilization efforts launched in China at the end of September appear to have paid off. As a result, the official annual growth target was hit. The momentum gained by China’s economy positioned the leadership to efficiently face the uncertainties of 2025.
Kavan Choksi briefly underlines how incremental policy measures helped China to sustain positive growth
The GDP of China grew by 5% in 2024 and surpassed 130 trillion yuan ($17.82 trillion) for the first time. It managed to successfully achieve pre-set key economic and social development goals. The milestone reflected the strong resilience of the Chinese economy, particularly in the face of distinctive domestic challenges and external pressures. This displayed China’s ability to navigate uncertainties and underscored a deeper truth: China has always managed to grow stronger despite facing discerning challenges.
The impressive growth rate in China, especially in the last quarter of 2024, was largely driven by booming exports and a robust manufacturing sector, which closely align with the industrial policy objectives of its leadership. The contribution of exports towards the GDP growth in China hit its highest level since 1997, ultimately delivering a record trade surplus of almost USD 1 trillion. This peak highlights the success of Beijing in achieving its policy objectives, which include improving the competitiveness of its industrial sector.
For the leadership in China, prioritizing technology and manufacturing is largely linked to geopolitical resilience, even more than economic stability to an extent. Build-up capacity requires considerable financial resources that may come at the expense of profitability. China’s leadership often views the matter through the lens of geopolitical rivalry.
GDP growth in China accelerated to 5.4 % in Q4, which was the strongest quarterly expansion in 2024. Almost all important components of GDP improved in Q4, with the assistance of expanded stimulus measures. As per Kavan Choksi, this enabled the government to meet its annual growth target. Robust manufacturing activity played a vital role in boosting GDP growth in Q4. Manufacturing growth increased by 6.2% in Q4, year-on-year, up from 5 % in Q3. Full year manufacturing growth in China was up by 6% in 2024, as opposed to a paltry 3.9% in 2023.
Industrial output in China was considerably benefited from strong exports, and contributed to record trade surplus in China. Net exports contributed about 30% to GDP growth in 2024, which was their highest share since 1997. Sustained foreign demand underpinned industrial activity in China, and provided a buffer against relatively weak domestic consumption.
The 5% growth rate in China has reflected a reasonable rise in overall GDP volume, and indicated a considerable expansion based on a high base of the year earlier. As the second largest economy of would, the 5% growth means that China’s incremental GDP 2024 was on par with the entire output of a medium-sized economy in the world. This achievement also puts a spotlight on China’s significant contribution to the global economic growth.