HONG KONG – China’s economy grew at an annual rate of 4.6% in the third quarter of 2024, according to data released by the National Bureau of Statistics on Friday, reflecting a slight slowdown from the 4.7% recorded in the previous quarter.
The figure falls short of the government’s target of “about 5%” growth for the year, raising concerns about the effectiveness of recent measures aimed at boosting the world’s second-largest economy.
Despite a series of policies designed to stimulate growth, the Chinese economy has struggled to fully recover from the effects of COVID-19 restrictions, which were lifted at the end of 2022. Consumer confidence remains low, and the real estate market continues to weigh heavily on overall economic performance.
In a statement, the National Bureau of Statistics said the economy was “generally stable with steady progress,” but acknowledged the challenges posed by a “complicated and severe external environment” and domestic economic issues.
Recent efforts by policymakers include reductions in mortgage rates and cuts to bank reserve requirements to encourage lending. However, analysts and investors have expressed disappointment at the absence of large-scale stimulus measures that many believe are necessary to jumpstart the economy.
China’s growth rate for the first three quarters of 2024 stood at 4.8%. On a quarterly basis, the economy grew by 0.9% between July and September, an improvement from the 0.7% growth in the previous quarter.
Key economic indicators show mixed results. Industrial output rose by 5.8% in the first three quarters compared to the same period last year, while retail sales increased by 3.3%. However, property investment plunged 10.1%, and new home sales dropped by 22.7%, underscoring the ongoing weakness in the real estate sector.
Earlier this week, China reported a sharp slowdown in exports, which grew by just 2.4% in September, down from 8.7% in August. Imports also remained sluggish, rising by only 0.3% and falling short of expectations.
“A modest fiscal stimulus may allow China to narrowly meet its annual growth target this year, but the economy is likely to slow again by the end of 2025,” said Zichun Huang of Capital Economics. “While retail sales and industrial output are showing improvement, the real estate sector remains a significant drag on growth.”
On Thursday, Beijing announced measures to provide additional financing for approved housing projects, but analysts remain skeptical about their potential impact. “These moves are unlikely to spark a major turnaround in the housing market or the broader economy,” Huang added.
In a further attempt to stabilize the economy, China’s state-run banks cut deposit rates on Friday, while the central bank introduced guidelines to support stock repurchases by companies and major shareholders. The move, aimed at boosting confidence in China’s stock markets, saw the Shanghai Composite index rise by 2.1%, with the Shenzhen benchmark gaining 2.4%.
Despite these efforts, the overall outlook for China’s economy remains uncertain, with analysts calling for more decisive government intervention to prevent a deeper slowdown.
Source: AP