China Economic Quarterly Q3 2024
The third quarter of 2024 saw China implement significant stimulus measures to bolster growth and address structural challenges. Our latest report delves into the Q3 data and new stimulus measures, providing timely insights for businesses operating in China.
Highlights
China’s economic momentum: Key takeaways from Q3 Data
- China's GDP grew by 4.6% in Q3, moderating slightly from 4.7% in Q2 and 5.3% in Q1, resulting in a 4.8% growth rate for the first three quarters. This puts the government's 5% annual target within reach, supported by intensified stimulus measures aimed at accelerating growth.
- The economy showed signs of a turnaround towards the end of Q3, with industrial output, consumption, and fixed asset investment stabilising in September.
- Despite the improvement, consumption has remained a weak link in the economy, with retail sales growth, PPI and CPI all highlighting the ongoing shortfall in aggregate demand.
- Robust exports remained a bright spot, mitigating the effects of sluggish domestic demand.
Topic in focus: China’s new stimulus to revive growth
- A suite of aggressive monetary easing measures has been rolled out, marking the most substantial monetary stimulus since the COVID-19 pandemic. These measures include cutting the reserve requirement ratio and policy interest rate, stabilising the housing market, and fortifying the financial sector.
- The initial round of fiscal stimulus features a RMB 10 trillion debt swap programme aimed at tackling the long-simmering structural challenge of local government debt. The immediate impact on growth is anticipated to stem from savings on interest payments and the extension of debt maturities for local governments.
- At the Central Economic Work Conference that concluded on 12 December, Chinese leaders pledged further support to maintain economic growth through stronger fiscal and monetary policy. Future stimulus measures are poised to invigorate domestic demand and counteract the adverse effects of rising geopolitical tensions. Additional measures will also include financing local governments' acquisition of idle land and unsold apartments, and bolstering state bank capital.
Contact us
Follow us
