China's economy grows slowly amid stimulus measures and market challenges. In image, visitors in front of mall in Bejing/AP Photo
China's economy grew at an annual rate of 4.6% in the third quarter of 2024, according to data released by the government on Friday. This marks a slight decrease from the 4.7% growth rate recorded in the previous quarter, and it falls short of the official target of “about 5%” growth for the year, a goal some analysts deem overly optimistic without more robust actions to boost consumer spending and revitalize the struggling property market.
The National Bureau of Statistics characterized the economy as “generally stable with steady progress,” despite facing a challenging external environment and complex domestic economic conditions. Even with the lifting of COVID-19 restrictions in late 2022, the economy has continued to lag, with low consumer confidence and a weakened real estate sector.
In recent weeks, Chinese authorities have introduced various measures aimed at stimulating growth. These include lowering mortgage rates for existing homes and allowing banks to increase lending by reducing reserve requirements. However, there has been a notable absence of significant new stimulus initiatives that many analysts believe are necessary to provide a substantial boost to the economy.
In the first three quarters of 2024, China’s overall growth rate stood at 4.8%. For the quarter ending in September, the economy expanded by 0.9%, slightly up from 0.7% growth in the previous quarter. Factory output increased by 5.8%, while retail sales rose by 3.3% year-on-year. In contrast, the property investment sector contracted by 10.1%, and new home sales plummeted by 22.7%, highlighting ongoing weaknesses in housing.
Additionally, China reported a sharp decline in exports for September, which grew by only 2.4% compared to the previous year, down from 8.7% in August. Imports also fell short of expectations, rising just 0.3%.
Analyst Zichun Huang of Capital Economics noted that while fiscal stimulus may help meet this year's growth target, it is unlikely to prevent a slowdown in 2025. Despite some improvement in retail and industrial sectors, the housing market continues to struggle.
On Friday, large state-owned banks lowered their deposit rates, and the central bank announced new guidelines for lending to stabilize the stock market. These measures contributed to a rally in Shanghai’s stock market, with the Composite index rising by 2.1%, while the Hang Seng index in Hong Kong climbed 1.9%.
