China's Economic Growth Slows: A Missed Target in 2024

China's economic growth is projected to reach 4.8% in 2024, according to a Reuters poll, falling short of the government's target of around 5%. This slowdown is attributed to a combination of weak domestic demand, a property market debt crisis, trade barriers, and global demand cool-off.


Weak domestic demand and a property market debt crisis have significantly impacted China's economic growth in 2024. The manufacturing sector has been grappling with tumbling producer prices and dwindling orders, leading to a contraction in factory activity for five consecutive months. In August, industrial profits plunged by 17.8% year-on-year, the biggest decline this year. This downturn highlights the need for bold stimulus efforts from the government to meet the growth target.


Trade barriers and global demand cool-off have also played a significant role in China's economic growth slowdown. Looming western trade curbs, including steep tariff hikes on Chinese products and potential electric vehicle (EV) tariffs, cloud the outlook for exports. The United States and the European Union are set to implement trade restrictions, further exacerbating the challenges faced by Chinese manufacturers.


The slowdown in export growth in the fourth quarter of 2024 has affected China's overall economic performance. Despite resilient export volumes, growing trade barriers are likely to become an increasing constraint on longer-term export growth. Analysts anticipate that it will take a long time to restore consumer and business confidence and get the $19 trillion economy on a more solid footing.


China's deflationary pressures and uncertainty surrounding the stimulus package have also impacted investor confidence and economic growth in 2024. The government's efforts to revive the sputtering economy have been met with skepticism, as investors await a clearer policy roadmap to overcome deflationary pressures and lift consumer confidence. The omission of a dollar figure for the stimulus package prolongs investors' nervous wait for a more comprehensive plan to support the economy.

In conclusion, China's economic growth in 2024 has been hindered by a combination of weak domestic demand, a property market debt crisis, trade barriers, and global demand cool-off. The government's efforts to stimulate growth and restore investor confidence will be crucial in determining the country's economic trajectory in the coming years.