China economic growth beats forecasts on stimulus push

China's economy ended 2024 on better footing than expected, helped by a series of stimulus measures, although the threat of a new trade war with the United States and weak domestic demand could damage confidence in a broader recovery this year.

For the full year 2024, the world's second-largest economy grew by 5.0%, data from the National Statistics Office showed on Friday, meeting the government's annual growth target of around 5%. Analysts had forecast growth of 4.9%.

The economy grew 5.4% in the fourth quarter from a year earlier, significantly exceeding analyst expectations and marking the fastest pace since the second quarter of 2023.

Analysts polled by Reuters had forecast fourth-quarter gross domestic product (GDP) would expand 5.0% from a year earlier, accelerating from the third quarter's 4.6% pace as a series of measures support began to come into force.

On a quarterly basis, GDP grew 1.6% in October-December, compared to a forecast increase of 1.6% and a revised increase of 1.3% in the previous quarter.

The world's second-largest economy has struggled to gain ground since the post-pandemic rebound quickly faded, with a prolonged housing crisis, rising local debt and weak consumer demand weighing heavily on activity.

Exports, one of the few bright spots, could lose steam as US President-elect Donald Trump, who has proposed steep tariffs on Chinese goods, returns to the White House next week.

Chinese officials have promised more stimulus this year, but analysts say the scope and magnitude of China's measures may depend on how quickly and aggressively Trump implements tariffs or other punitive measures.

But even as strong exports boosted the country's trade surplus to a record level of $992 billion last year, the yuan currency has been under selling pressure. A dominant dollar, falling Chinese bond yields and the threat of higher trade barriers have pushed the yuan to 16-month lows.

A series of December economic readings released on Friday suggested the economy gained traction heading into the new year, helped by a flurry of government support measures.

Industrial production grew 6.2% year-on-year in December, accelerating from November's 5.4% pace and beating expectations for a 5.4% rise in a Reuters poll. It marked the fastest growth since April last year.

Retail sales, a gauge of consumption, rose 3.7% last month, accelerating from November's 3.0% pace as consumers began preparing for the upcoming Lunar New Year in January.

As companies were cautious about hiring workers ahead of the festival and with concerns about potential trade disputes with the U.S., the national survey-based unemployment rate rose to 5.1% in December from 5. .0% November.