China’s Economy Report Card for 2024: GDP, Trade, FDI
China’s economy grew 5% in 2024, driven by stimulus measures, strong exports, and high-tech investment, despite challenges like weak domestic demand and demographic pressures. Structural reforms and targeted policies are essential for sustaining growth into 2025.
China’s economic performance in 2024 saw a return to steady growth, achieving a 5 percent GDP expansion in line with the government’s target, as per the official data released by the National Bureau of Statistics (NBS) on January 17, 2025. This outcome was largely bolstered by stimulus measures that helped drive a stronger-than-expected fourth-quarter recovery. While the country’s economy faced challenges such as declining population numbers and sluggish consumer demand, there were signs of optimism across key sectors, including industrial output and digital economy growth.
Additionally, China is beginning to pivot away from its dependence on the property sector, with the digital economy playing an increasingly significant role in economic expansion.
Despite ongoing challenges, including external pressures and insufficient demand, Chinese officials remain confident about the country’s growth potential heading into 2025, marking the final year of the 14th Five-Year Plan. This optimism is grounded in China’s commitment to ramping up stimulus measures and providing stronger policy support to navigate these hurdles.
This article explores the major economic highlights from 2024 and examines the key trends, challenges, and opportunities that will shape China’s economy in the year ahead.
China’s GDP in 2024
In 2024, China’s GDP reached RMB 134.91 trillion (US$18.80 trillion), maintaining its position as the second-largest economy in the world, behind only the United States, whose projected GDP for 2024 stands at approximately US$29 trillion. This reflects a year-on-year growth of 5.0 percent, in line with the government’s official target of “around 5 percent“ set during the 2024 Two Sessions. While slower than the 5.2 percent growth achieved in 2023, it highlights a stable recovery largely driven by strong export performance and targeted stimulus measures throughout the year.
Quarterly growth
The economy saw accelerated growth in the final quarter of 2024, with GDP expanding by 5.4 percent, surpassing expectations and making a substantial contribution to the overall 5.0 percent increase. Indeed, quarterly growth performance in 2024 showed steady improvement: the first quarter recorded a 5.3 percent increase, followed by 4.7 percent in Q2, and 4.6 percent in Q3.
Sectoral trends
Sectoral performance highlights revealed the manufacturing and service sectors as key drivers.
China’s manufacturing sector above the designated size (companies with an annual main business income of above RMB 20 million) grew by 6.1 percent year-on-year. Notably, equipment manufacturing expanded by 7.7 percent, while high-tech manufacturing rose by 8.9 percent, reflecting China’s strategic emphasis on technological advancement. In terms of products, production in new energy vehicles, integrated circuits, and industrial robots grew by 38.7 percent, 22.2 percent, and 14.2 percent, respectively.
The services sector saw a 5.0 percent year-on-year growth in 2024, driven by dynamic growth in several sub-sectors:
- Information transmission, software, and IT services: +10.9%
- Leasing and business services: +10.4%
- Transportation, storage, and postal services: +7.0%
- Accommodation and catering services: +6.4%
- Financial services: +5.6%
- Wholesale and retail trade: +5.5%
This sector’s performance reflects both domestic consumption recovery and rising global demand for China’s services exports.
Retail sales and consumption
China’s total retail sales of consumer goods reached RMB 4.88 trillion (US$679.81 billion), a growth of 3.5 percent from the previous year. This demonstrated the resilience of the country’s consumption. Online retail sales grew by 7.2 percent, accounting for RMB 1.55 trillion (US$215.92 billion), underlining the ongoing digitalization of consumer behavior.
Boosted by consumption support measures such as trade-in programs and targeted coupons, sales of basic and some upgraded consumer goods showed strong growth. Retail sales of household appliances and audio-visual equipment, sports and entertainment products, communication devices, and grain and oil products at businesses above a designated size grew by 12.3 percent, 11.1 percent, 9.9 percent, and 9.9 percent, respectively, for the year. Meanwhile, restaurant revenue reached RMB 5.5 trillion (US$776.2 billion), growing by 5.3 percent, outpacing the average retail sales growth.
Fixed asset investment
Fixed asset investment (excluding rural households) grew by 3.2 percent, amounting to RMB 5.14 trillion (US$716.03 billion). investment landscape demonstrated strong sectoral growth, particularly in manufacturing, infrastructure, and high-tech industries, reflecting the government’s strategic focus on sustaining economic momentum.
Manufacturing investment played a pivotal role in China’s economic expansion, with a 9.2 percent increase year-on-year, outpacing the overall investment growth by 6.0 percentage points. Key segments of the manufacturing sector showed notable growth:
- Consumer goods manufacturing: Investment surged by 14.7 percent, driven by increased demand for quality products amid expanding consumer markets.
- Equipment manufacturing: A steady growth of 9.0 percent signaled continued modernization and innovation in industrial production.
- Raw Materials manufacturing: Investment in this category grew by 7.6 percent, reflecting ongoing efforts to secure and enhance China’s material supply chains.
Besides, the issuance of ultra-long-term special national bonds and local government special bonds boosted infrastructure investment in 2024, leading to a 4.4 percent year-on-year increase. The high-tech sector maintained a robust investment trajectory, outpacing overall growth. In 2024, total high-tech industry investment rose by 8.0 percent, 4.8 percentage points higher than the national average.
Policies promoting large-scale equipment upgrades continued to show positive effects, with investment in machinery and tools growing by 15.7 percent, significantly outpacing total investment growth. This increase accounted for 67.6 percent of the total investment growth, contributing an additional 2.2 percentage points to overall investment expansion. The acceleration in equipment upgrades is indicative of China’s push towards more advanced manufacturing capabilities and automation.
China’s accelerated shift to a new energy system drove a substantial increase in green energy investments in 2024. Investment in the electricity, heat, gas, and water supply sector grew by 23.9 percent, with renewable energy sources seeing particularly strong growth.
Foreign trade
China’s foreign trade achieved a historic milestone in 2024, with the total import and export volume reaching a record RMB 43.85 trillion (US$5.98 trillion), marking a 5 percent year-on-year increase. This growth reflects a steady rebound in global demand and highlights China’s resilience amidst a challenging global economic landscape.
In RMB terms, exports increased by 7.1 percent, reaching RMB 25.45 trillion, while imports rose by 2.3 percent to RMB 18.39 trillion. The significant growth in exports of high-tech products—such as electric vehicles, industrial robots, and 3D printers—highlights China’s shift towards an innovation-driven trade model. Electromechanical goods comprised 59.4 percent of total exports, achieving an 8.7 percent growth rate, while exports of high-end equipment surged by more than 40 percent.
China also reinforced its role as the world’s largest trader in goods and a pivotal partner for over 150 economies. Trade with Belt and Road Initiative (BRI) countries expanded by 6.4 percent, surpassing half of China’s total trade for the first time. ASEAN remained China’s largest trading partner for the ninth consecutive year, while trade with the EU and US grew by 1.6 percent and 4.9 percent, respectively.
Cross-border e-commerce also played a significant role, with trade in this sector reaching RMB 2.63 trillion (US$359.04 billion), up by RMB 1 trillion (US$136.51 billion) since 2020. These developments demonstrate China’s ability to adapt to evolving global trends and leverage new opportunities.
China’s trade success in 2024 reflects its focus on quality and technological innovation. The growth in exports of green products like wind turbines and photovoltaic systems highlights its contributions to global energy transitions. However, rising external uncertainties, including protectionist measures and geopolitical tensions, remain significant challenges.
To navigate these headwinds, China has implemented policies to stabilize foreign trade, encourage cross-border e-commerce, and explore emerging markets. Businesses are increasingly diversifying their markets and investing in overseas ventures to mitigate risks.
Foreign direct investment
Despite the global economic slow recovery and rising uncertainties, China’s ability to maintain the growth of newly established foreign-invested enterprises highlights its continued attractiveness to foreign investors. The data also reflects the ongoing optimization of China’s foreign investment structure, with high-tech industries and professional services increasingly drawing foreign capital, indicating a shift toward more advanced and specialized sectors.
In 2024, the number of newly established foreign-invested enterprises in the country reached 59,080, marking a 9.9 percent increase compared to the previous year. However, the actual utilization of foreign direct investment (FDI) declined by 27.1 percent, totaling RMB 826.25 billion (US$115.56 billion).
Sector-wise, the manufacturing industry saw a substantial portion of the FDI, with RMB 221.21 billion (US$30.85 billion) in actual foreign investment, while the service sector attracted a larger share, receiving RMB 584.56 billion (US$81.47 billion). Among the high-tech sectors, high-tech manufacturing stood out with RMB 96.29 billion (US$13.42 billion) in FDI, accounting for 11.7 percent of the total foreign investment in China. Notably, certain high-tech industries saw impressive growth in foreign investment, including the medical instruments and equipment manufacturing industry, which grew by 98.7 percent, the professional technical services sector, which saw a 40.8 percent increase, and the computer and office equipment manufacturing industry, which grew by 21.9 percent.
In terms of source countries, several European and Asian nations showed strong growth in their investments in China. Spain saw the largest increase, with foreign investment rising by 130.8 percent, followed by Singapore at 10.8 percent, Germany at 2.2 percent, and Switzerland at 1 percent (including data from free port investments).
How to read China’s 2024 economic data
China’s 2024 economic performance underscores its resilience and determination to maintain growth momentum despite an increasingly complex global and domestic environment. However, beneath the headline figures lie structural challenges that could hinder sustained recovery and long-term development.
One of the most pressing issues is China’s demographic crisis. For the third consecutive year, the population has declined, driven by low birth rates and an ageing population. By the end of 2024, the working-age population accounted for only 60.9 percent of the total, while those aged 65 and above represented 15.6 percent. These trends threaten to constrain labor supply and increase the burden on social welfare systems, raising concerns about the economy’s ability to sustain its growth trajectory in the coming years.
Consumer demand also remains a weak spot. Although retail sales grew by 3.5 percent and online retail sales by 7.2 percent, these figures fall short of expectations for a robust domestic recovery. Deflationary pressures, persisting for seven consecutive quarters, further underscores the lack of consumer confidence. While export-driven sectors continue to thrive, weak domestic consumption highlights a critical imbalance in the economy.
Global trade uncertainties add to another layer of complexity. A 7.1 percent increase in exports in 2024 demonstrates China’s strong manufacturing base, but overcapacity and strained relations with major trading partners loom as potential risks. Foreign importers’ stockpiling of goods may also dampen export demand in 2025, particularly as geopolitical tensions remain unresolved. As one analyst noted, “The strong export surge fuels discontent among trading partners, while overcapacity and overproduction continue to weigh on the economy.”
Market sentiments reflect a cautious optimism tempered by concerns about structural vulnerabilities. Analysts at J.P. Morgan observed that investor reactions to China’s growth figures have been muted, with many awaiting policy clarities following the Chinese New Year. There is recognition that the government has room to bolster consumer and business confidence, but the effectiveness of these measures will depend on targeted reform. As one expert highlighted during an interview with CNBN, “There is room for domestic consumers and business confidence to rebound with the right policies in place.”
Looking ahead, the Chinese government is expected to continue implementing stimulus measures, but there is a growing emphasis on structural reforms. These reforms aim to restore private sector confidence, encourage investment, and shift the economy toward more sustainable growth models. While export momentum and infrastructure spending will remain important drivers, addressing weak domestic demand and demographic challenges will be critical for ensuring long-term stability.
In sum, while 2024 marked a year of recovery and resilience for China’s economy, the path forward will require careful balancing of growth initiatives with deeper reforms. As policymakers navigate these challenges, the focus will increasingly shift toward addressing structural weaknesses to sustain the momentum into 2025 and beyond.
(1USD = 7.1785 RMB)
Read More:
- An Introduction to Doing Business in China 2025
- China Industries to Watch in 2025
- China’s Central Economic Work Conference (CEWC): Key Takeaways and Priorities for 2025
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