BEIJING (Reuters) – China’s economy grew 5.4% in the fourth quarter from a year earlier, official data showed on Friday, significantly beating analysts’ expectations and enabling the government to meet its annual growth target.
KEY POINTS
* 2024 GDP +5.0% (versus target of around 5%)
* Q4 GDP +5.4% y/y (f’cast +5.0%, Q3 +4.6%)
* Q4 GDP +1.6% q/q s/adj (f’cast 1.6%, Q3 +1.3% revised)
* Dec industrial output +6.2% y/y (f’cast +5.4%, Nov +5.4%)
* Dec retail sales +3.7% y/y (f’cast +3.5%, Nov +3.0%)
* 2024 fixed asset investment +3.2% (f’cast +3.3%, Jan-Nov +3.3%)
* 2024 property investment -10.6% (Jan-Nov -10.4%)
* Fears of more U.S. trade tariffs clouding 2025 outlook
COMMENTARY:
CHARU CHANANA, CHIEF INVESTMENT STRATEGIST, SAXO, SINGAPORE
“That’s a sigh of relief for Chinese assets, it signals that the stimulus measures of 2024 are having an impact. China markets still face structural headwinds as well as tariffs risks, and the response to those will be the ultimate driver of long-term returns. The beat is quite strong on industrial production – perhaps that’s because of the export front-loading to the U.S. before the new administration’s tariffs kick in. Property still weak, retail sales comes more from the stimulus impact.
“Positive signals, but we will need to see how stimulus and tariff risks develop from here for the momentum to sustain.”
BACKGROUND
* China’s economy has struggled for traction since a post-pandemic rebound quickly fizzled out, with a protracted property crisis, weak demand and high local government debt levels weighing heavily on activity.
* Policymakers have unveiled a blitz of stimulus measures since last September to revive sputtering growth, and have pledged to do more this year as U.S. President-elect Donald Trump, who has proposed hefty tariffs on Chinese goods, is set to return to the White House next week.
* Analysts say the scope and size of China’s moves may depend on how quickly and aggressively Trump implements tariffs or other punitive measures.
* China is expected to unveil growth targets and stimulus plans during the annual parliament meeting in March.
* The world’s second-largest economy is likely to slow to 4.5% in 2025 and cool further to 4.2% in 2026 amid U.S. tariff pressures, a Reuters poll showed.
