China’s Q3 GDP hits weakest pace since early 2023, backs calls for more stimulus
In the third quarter of 2024, China’s economy recorded a growth rate of 4.6%, slightly above forecasts but below the previous quarter’s 4.7%. Official data released shows that while consumption and factory output figures exceeded expectations last month, the country’s tumbling property sector remains a significant hurdle for Beijing’s efforts to rejuvenate growth.
Authorities have intensified policy stimulus efforts since late September, though markets are eager for further details regarding the size of these packages and a clear strategy for sustainable long-term economic stability. Bruce Pang, Chief Economist at JLL, remarked, “China’s Q3 data is not a turn-up for the books… The performance aligns with market expectations, given the weak domestic demand and a still struggling housing market.”
At a press conference following the data release, officials expressed optimism about meeting the government’s full-year growth target of approximately 5%. Sheng Laiyun, deputy head of China’s statistics bureau, stated, “We are fully confident in achieving the full-year target,” citing anticipated stabilisation and recovery in the economy in the fourth quarter.
Despite this optimism, the continuing weakness in the property sector casts a shadow over the outlook. Analysts caution that while industrial output and retail sales showed promise in September, the underlying structural challenges—such as overcapacity, high debt levels, and an ageing population—remain largely unaddressed.
Betty Wang, an economist at Oxford Economics, noted, “We would downplay the importance of better-than-expected indicators given that structural weakness in the property and household sectors remains.”
While the recent stimulus measures might mitigate some risks to future growth, experts like Nishihama believe they may not be enough to tackle deeper, long-standing issues. “Chinese authorities are missing the mark—they are not doing what should be done while leaving structural problems unattended,” he said.
As China navigates these economic complexities, the coming months will be crucial for determining the effectiveness of its policy measures and the overall health of the economy moving forward.
