China’s economy grew at one of the slowest rates in decades last year, according to official data released Monday, as officials struggle to overcome persistently low consumer spending and a debt crisis in the country’s property sector.
While the five percent expansion was in line with Beijing’s annual target — a low-ball figure analysts have compared to a political comfort blanket — observers warned it was driven largely by exports and masked weak sentiment on the ground.
In a sign of the work ahead for leaders, the data showed a significant slowdown in the final quarter of last year, growing at 4.5 percent year-on-year as expected. In quarterly terms, the economy grew 1.2 percent in October to December.
Photo: AFP
“The impact of changes in the external environment has deepened,” an official with China’s National Bureau of Statistics, Kang Yi (康義), said.
“The domestic contradiction of strong supply and weak demand is prominent, and there are still many old problems and new challenges in economic development,” he told a news conference in Beijing.
Policies and measures to boost consumption would continue into this year, Kang said, including a trade-in scheme for old household appliances.
“The gradual implementation of policies to clear unreasonable restrictions in the consumption sector will support consumption growth,” he said.
Figures on Monday showed annual growth in retail sales, a key indicator of consumption, slowed to 3.7 percent last year from four percent in 2024, while the reading for last month was 0.9 percent on-year — the weakest pace since the end of 2022, when stringent COVID-19 countermeasures ended.
Industrial output expanded 5.9 percent last year, a slight slowdown from the previous year, while the 5.2 percent increase seen last month was an improvement on November’s pace.
Fixed-asset investments shrunk 3.8 percent last year, reflecting a rebalancing following decades of heavy spending on property and infrastructure.
The broader housing market remains sluggish, with real estate investment down 17.2 percent last year, the data showed.
The re-election of US President Donald Trump in January last year and the revival of a fierce trade war between the world’s two largest economies added to Beijing’s problems.
Official data showed Chinese exports to the US plunged 20 percent last year, but that had little impact on demand for Chinese products elsewhere.
Robust exports remained a bright spot in the cloudy economic picture despite the bruising trade war.
China’s trade surplus hit a record US$1.2 trillion last year, with officials lauding a “new historical high” filled by other trade partners.
Shipments to the ASEAN rose 13.4 percent year-on-year, while exports to Africa surged 25.8 percent and those to the EU were up 8.4 percent.
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