China’s Economy in 2024 & Key Focus Areas for 2025
Jan 16-2025
*This article is based on the speech of Xu Xianchun, a statistician.
The speech addresses two key topics: first, an assessment of China’s economic fundamentals in 2024. Second, an outlook for 2025, informed by the Central Economic Work Conference and the Politburo of the Communist Party of China meeting held in late 2024.
Summary of China's Economy in 2024
In summary, based on the GDP growth data for the first three quarters and the relevant basic data for October and November, it is expected that the economic growth target of around 5% can be achieved in 2024.
Quarterly data shows a declining growth trend in the first three quarters of 2024, followed by a rebound in Q4. Sector-wise, the 2024 economic trajectory was primarily driven by the secondary industry’s value-added growth. Demand-side analysis highlights consumer spending as the key growth driver.
In terms of income, national per capita disposable income growth slowed in the first three quarters but recovered in Q4. Price-wise, CPI rose modestly in early 2024 before dipping in Q4, while PPI declines narrowed in the first half but widened in the second half.
How to View China's Economy in 2025?
External challenges—complexity, severity, and uncertainty—continue to intensify, while domestic issues such as insufficient effective demand and weak public confidence persist. Policies for 2025 are expected to roll out faster, with implementation potentially accelerated.
From the policy objectives
The top priority is comprehensive domestic demand expansion through a two-pronged approach. First, stimulating consumption, which holds strong endogenous potential. The Central Economic Work Conference proposed a targeted campaign to boost consumption. Second, expanding investment. Significant investment opportunities remain, with a focus on supporting “two heavy” projects (major infrastructure and industrial upgrades) and urban renewal initiatives.
On policy implementation
The Politburo meeting reiterated the need to mobilize enthusiasm across all stakeholders and strengthen endogenous growth drivers.
From the perspective of policy instruments
Regarding monetary policy, the Central Economic Work Conference reaffirmed “moderate easing,” emphasizing appropriately timed interest rate cuts, ample liquidity, and keeping the RMB exchange rate stable at a reasonable equilibrium level.
From the aspect of fiscal policy, the tone shifted from “active” to “more active.” The Central Economic Work Conference called for raising the deficit ratio and expanding special bond and treasury bond issuance. The Politburo meeting emphasized streamlining special bond approvals, enhancing local governments’ fiscal autonomy, improving bond lifecycle management, and accelerating project implementation.
Overall, the Politburo meeting and Central Economic Work Conference have recalibrated policy implementation through adjusted intensity, tone, and timing. The outcomes are highly anticipated.
