Chinese President Xi Jinping officially announced that the country has already achieved its 5% GDP growth target for 2024.
Speaking at a high-level New Year event hosted by Xi, the country’s top political advisory body Announce The economy is “stable and progressing,” stressing that employment has remained stable and that inflation is under control.
This comes as policymakers in Beijing began implementing strict measures since September to keep the economy on track. The economists were tied Growth rate 4.8%
Manufacturing leads to recovery, but consumers decline
China’s industrial output proved to be a bright spot in November, rising 5.4% year-on-year. The country’s high-tech manufacturing sector took the lead, recording an impressive growth of 9.1% in the third quarter.
But while factories are running, consumer spending tells a different story. Retail sales reached CNY4.38 trillion (about US$608.82 billion) in November, reflecting an increase of only 3%. This slowdown shows continued caution among Chinese consumers who are tightening their wallets amid economic uncertainty.
Weak domestic demand remains a major drag on the economy, with consumer confidence weak and the recovery in household spending slowing. On the investment side, investment in fixed assets increased by 3.3% between January and November.
Sectors outside the turbulent real estate market recorded stronger growth, with investments rising by 7.7%. However, these gains were not enough to offset the repercussions of the country’s ongoing real estate market problems. The real estate sector, which has long been one of the pillars of China’s economic engine, remains stuck in a long-term stagnation despite government intervention.
Inflation flirts with deflation
Inflation in China barely moved in November, with the Consumer Price Index rising just 0.2%. People are now worried about deflation, and it is not helpful for producer prices to continue to fall. This reduces the company’s profits and suppresses the economy.
China’s overall unemployment remains steady at 5.1%, which seems acceptable, but youth unemployment remains a disaster. It kills people’s confidence and makes them spend less.
Then there is the real estate market. No matter how much help the government gives it, it is still a complete disaster and drags the economy down even further.
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