CHINA’S economy demonstrated a stable expansion in the first half of 2024, achieving a year-on-year GDP growth of 5%, equivalent to 61.68 trillion Yuan (approximately 8.65 trillion US dollars), according to data released by the National Bureau of Statistics (NBS) on Monday last. Despite facing significant domestic and international challenges, the country’s economic performance remained resilient, underpinned by policy incentives, a rebound in external demand and the emergence of new quality productive forces.
GDP Growth: The first half of 2024 saw China’s GDP grow by 5% year-on-year. In the second quarter, the GDP expanded by 4.7% year-on-year, slightly down from the 5.3% growth recorded in the first quarter. This steady growth indicates a resilient economy despite various challenges. Retail Sales and Investment: Retail sales of consumer goods increased by 3.7% year-on-year in the first half, reflecting a recovery in domestic consumption. Fixed-asset investment rose by 3.9%, while value-added industrial output expanded by 6%. These figures highlight the ongoing recovery and growth in key sectors of the economy.
Unemployment and Income: The surveyed urban unemployment rate stood at 5.1% in the first half, down 0.2% age points from the same period last year. Per capita disposable income grew by 5.4% year-on-year in nominal terms, outpacing economic growth. This indicates an improvement in living standards and employment conditions. China’s industrial production has turned smarter and greener. The high-tech manufacturing sector saw an output increase of 8.7% year-on-year in the first half. Notable growth was observed in the production of service robots (22.8%) and new energy vehicles (34.3%). These advancements are a testament to China’s commitment to upgrading its industrial base and embracing new technologies.
China has implemented several measures to support economic growth, including a new round of consumer goods trade-ins and the issuance of ultra-long special treasury bonds. These initiatives aim to boost investment and consumption, which have been major drivers of growth. In the first half, final consumption contributed 60.5% to the economic expansion, or 3 percentage points to the GDP growth.
Premier Li Qiang emphasized the need for greater efforts to address complex growth challenges, including ensuring solid macroeconomic policy delivery, leveraging policy synergies, and enhancing the effectiveness of policy implementation. These efforts are crucial for maintaining sustained and healthy economic development. The NBS acknowledged that China faced a more uncertain, complex, and severe external environment, alongside new domestic challenges such as deepening structural adjustments. Despite these difficulties, the bureau noted that the overall economic environment continued to improve in a stable manner.
The milder second-quarter GDP growth compared to the first quarter was attributed to short-term factors such as extreme weather and floods, as well as rising difficulties from insufficient effective demand and unsmooth economic flow at home. However, these challenges are seen as growing pains that can be addressed through further development and policy measures.
China remains a key engine for global growth. Many foreign-invested institutions, including Barclays and Goldman Sachs, have raised their growth expectations for China’s GDP in 2024 to 5%. The International Monetary Fund (IMF) also revised China’s economic outlook to 5%, indicating confidence in China’s economic stability and potential for growth. According to the IMF, a 1 percentage point increase in China’s GDP growth could result in an average of 0.3 percentage point increase in growth for other economies. This underscores China’s significant influence on the global economy.
A key aspect of China’s growth against headwinds has been the emergence of new growth drivers and the upgrading of traditional industries. Investment in high-tech manufacturing and services expanded by 10.1% and 11.7%, respectively, in the first half. This far exceeds the 3.9% headline growth of fixed-asset investment, indicating a shift towards high-quality development. The ongoing third plenary session of the 20th Central Committee of the Communist Party of China is expected to further liberate and develop social productive forces, boosting social vitality and economic momentum. The session’s focus on comprehensively deepening reform and advancing Chinese modernization is crucial for addressing emerging challenges and sustaining long-term growth.
Persisting issues like the property slump, inadequate demand and overcapacity pose significant challenges for China. Nonetheless, the NBS and Premier Li stress the need for a comprehensive approach to tackle these issues. By advancing development and implementing targeted measures, China seeks to overcome these obstacles and sustain steady growth. The first half of 2024 showcases a stable and resilient economy, with a 5% GDP growth, underpinned by robust policy measures, technological advancements and high-quality development. China’s role as a key engine of global growth remains steadfast as it addresses both domestic and external challenges.
The ongoing reforms and policy initiatives are expected to further stabilize and improve the economic fundamentals in the second half of the year. With a focus on high-quality development and strategic investments, China is well-positioned to achieve its annual growth target and contribute to global economic stability. The resilience and adaptability of China’s economy will be crucial in navigating the evolving global landscape and ensuring sustained prosperity.
—The writer is President of the BRI for Sustainable Development (BRISD) and an international expert on Youth Development.
