China continues to grapple with domestic economic challenges, including a sluggish property sector and weak consumption, even as global trade strategies shift due to US-imposed tariffs, a new report reveals.
According to CareEdge Rating, China’s real GDP grew by 5 percent in 2024, down from 5.4 percent in 2023. The country’s property market remains a major concern, with indicators such as “floor space started” and “floor space sold” continuing to decline. Real estate fixed asset investment also dropped by 11 percent, marking the third consecutive year of contraction.
Consumer confidence remains historically low, failing to recover after the second wave of COVID-19. High youth unemployment and the property sector downturn have further dampened sentiment. This has weakened consumption, reducing its contribution to GDP growth and keeping inflation at a subdued 0.3 percent over the past year.
Despite increased stimulus measures by Chinese policymakers in 2024, the report suggests their effectiveness in reviving growth remains uncertain. At the December Politburo meeting, officials pledged to maintain a moderately loose monetary policy and a proactive fiscal policy in 2025, signaling more stimulus measures ahead amid growing trade tensions with the US.
The report warns that China's current consumer goods trade-in program may not be enough to drive sustainable consumption. Strengthening employment and social safety nets may be crucial for long-term growth.
Analysts estimate that additional US tariffs could lower China’s real GDP growth by 0.25 percentage points in 2025, exacerbating economic uncertainty and prolonging disinflationary pressures.
