Late last week, it was reported that China’s economy expanded in the fourth quarter of 2024, pushing it past the government’s target for 2024. China’s economy struggled for traction over 2024 in response to muted domestic demand and a troubled property market. However, the government has stepped up with monetary and fiscal policy support, which helped growth over the quarter.

• China’s gross domestic product expanded by 5.4% year-over-year in the fourth quarter of 2024. This marks the fastest pace of growth since the second quarter of 2023. Economists were expecting a 5.2% pace of growth, based on a Bloomberg survey.
• Stimulus measures from China’s government are helping to stabilize growth in the world’s second-largest economy. The economy also got a boost from an increase in exports, due in part to US purchasers front-loading orders ahead of potential tariffs.
• In December, retail sales rose by 3.7% year-over-year, which was a larger increase than the 3.0% gain in November. Sales growth was relatively broad-based. It might be too early to tell if domestic demand is turning around, but recent results have been positive.
• Industrial production also accelerated in December, rising by 6.2%. This marked its largest annual increase since April 2024.
• The People’s Bank of China held its January fixing on Sunday night, where it held its one- and five-year loan prime rates steady at 3.10% and 3.60%, respectively.

China’s government has pledged to do even more for its economy this year. This could be necessary, particularly if the US implements widespread tariffs against China, which could significantly impact economic activity. President Donald Trump officially took office yesterday. Economies around the world, such as Canada and China, are anticipating tariffs against their exports to the US but did get some welcome news: tariffs will not come into effect on day one.

If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.