China’s Economic Resilience: Strategies for Continued Growth Beyond 2024

China's Economic Resilience: Strategies for Continued Growth Beyond 2024

Having met its economic growth target for 2024, China is looking to sustain this momentum through innovative policies and a focus on consumption. The Chinese economy reached a GDP of 134.9 trillion yuan (approximately $18.5 trillion), marking a year-on-year growth of 5%. The National Bureau of Statistics (NBS) has highlighted the importance of these achievements during a press conference where officials emphasized that new policies aiming to stimulate consumption played a pivotal role in this success.

According to Kang Yi, the Commissioner of NBS, recent government initiatives were crucial in stabilizing markets and fostering a more supportive environment for businesses. Xu Hongcai, the Deputy Director of the Economic Policy Commission at the China Association of Policy Science, echoed this sentiment, noting that effective policies led to a robust economic rebound in 2024 fueled by better-than-expected export performance and investments in high-tech sectors.

The General Administration of Customs of China reported that total imports and exports reached 43.85 trillion yuan (about $6 trillion) during the year, a 5% increase compared to the previous year. Exports alone generated 25.45 trillion yuan ($3.5 trillion), reflecting a notable 7.1% rise. Several sectors contributed to these gains by combining technological and industrial innovations. Additionally, China improved its ranking in the Global Innovation Index to 11th, moving up one spot from the previous year.

The advancements in new-energy industries marked another significant highlight. The greening of this sector accelerated, increasing the share of clean energy generation in the mix. By the end of 2024, hydropower, nuclear power, wind power, and solar power collectively accounted for 32.6% of the country’s electricity generation, showcasing a commitment to sustainable energy. Furthermore, the use of new-energy vehicles (NEVs) soared, reaching 31.4 million units, which is a staggering increase of 260 times over the last decade. This surge in NEV usage was facilitated by the development of robust charging infrastructures and the availability of eco-friendly consumption choices.

The government has also employed strategies to boost domestic consumption, such as a trade-in program unveiled in late August last year, encouraging citizens to replace older appliances and vehicles with modern, energy-efficient alternatives. This initiative significantly impacted sales in 2024, with total auto sales reaching a record high of 31.44 million units according to the China Association of Automobile Manufacturers.

Looking forward, the Chinese government is gearing up for a more aggressive macroeconomic policy approach for 2025, promoting a proactive fiscal policy alongside a moderately loose monetary policy. Contributing around 30% of global economic growth in recent years, China continues to assert itself as a vital engine driving the global economy. The country remains positioned as the second-largest global importer, with a total import value hitting 18.39 trillion yuan ($2.5 trillion) in 2024.

Despite these successes, challenges persist. Kang Yi pointed out that China remains a developing nation with significant gaps in per-capita GDP compared to wealthier countries. Ongoing issues such as weak consumer spending, pressures on employment, and business struggles indicate a potential slowdown. Global uncertainties, particularly geopolitical tensions and protectionist policies, further complicate the economic landscape.

Moreover, the national Producer Price Index (PPI) witnessed a year-on-year decline of 2.2%, reflecting sluggish demand both domestically and abroad. While fixed assets investment grew by 3.2% annually, the private investment sector faced a slight contraction of 0.1%, suggesting a lack of confidence among private enterprises. During a recent symposium attended by leading entrepreneurs, President Xi Jinping urged the bolstering of confidence to ensure the healthy development of the private sector.

Experts like Xu have advised the government to direct more funds towards high-tech and green industries while improving conditions for private and foreign-funded businesses to stimulate investment. Initiatives to elevate incomes, bolster employment, and enhance social security for low-income populations are also under discussion. Specific measures aimed at increasing rural consumption and tapping into emerging sectors—such as the aging population—are recommended as new drivers for economic expansion.

In conclusion, as China steps into 2025, it grapples with its successes and challenges while devising strategies to secure sustainable growth through innovation, consumption, and targeted policies to address economic disparities.