China: Signs of Economic Recovery, Production +7%

“Conditions exist to achieve the growth target of around 5% in 2024”

China’s economy is growing again: according to China’s National Bureau of Statistics, manufacturing demand grew steadily in the first two months of 2024, while employment and prices generally remained stable. From January to February, production rose at a 7.0% annualized rate, which is 0.2 percentage points above the increase in December 2023, when a 5% increase was expected. The national service sector output index increased by 5.8% year-on-year. Retail sales also rose +5.5% in January-February, exceeding expectations of +5.2%. Over the same period, fixed investment rose +4.2% (estimate +3.2%), and the unemployment rate moved from 5.2% to 5.3%.

National Bureau of Statistics spokesman Liu Aihua told China’s Xinhua news agency: “China has the conditions to achieve an annual growth target of around 5% in 2024. The Chinese economy continues to improve, and the positive factors contributing to economic recovery are accumulating and strengthening.” However, external instability and uncertainty, as well as internal challenges, such as lack of demand, remain.

Either way, the strong performance in January-February is a good foundation for growth for the entire year, Liu said. He hoped that government support would play an increasing role through large-scale equipment upgrades, consumer goods trading, and the issuance of special very long-term Treasury bonds.