China’s economy showed signs of stabilization in October 2024. It experienced the highest retail sales growth in eight months, which indicated that Beijing’s latest round of stimulus has provided a major boost to multiple key sectors. S per Kavan Choksi, property prices in China saw a relatively smaller decline in October, while fixed asset investment and value added of industry growth stayed stable during the month.
Kavan Choksi Underlines How China’s Economy Further Stabilised in October 2024
As a series of existing and new support policies took effect, China released improving economic data for October 2024. As per Chinese analysts and officials, economic growth and recovery are likely to be further consolidated as more of these policies are implemented. Based on the data by the National Bureau of Statistics, retail sales in China increased 4.8% from a year earlier, up from September’s gain of 3.2%. Industrial output, on the other hand, went up 5.3% from a year earlier. Owing to the accelerated implementation of the existing policies, as well as the introduction of a raft of incremental policies in October, China’s economy managed to show a stable growth trend. Major economic indicators recovered to a good extent. These indicators captured the immediate impact of China’s boldest stimulus measures since the pandemic. The measures were aimed at making sure that China reaches its annual growth target of around 5%.
Economic growth decelerated in the last quarter to its slowest pace since early 2023. This prompted policymakers in China to deliver out-sized interest-rate cuts, as well as provide support to the property and stock markets. Authorities in the country also rolled out a $1.4 trillion debt swap program with the goal of curbing debt risks faced by local authorities, and free up fiscal room for them to promote growth.
In September, China ramped up its support policies, implementing targeted stimulus measures to steady economic activity as it worked toward its primary economic and social development goals for the year. These efforts included substantial interest rate cuts and initiatives to stabilize both the property and capital markets. As per Kavan Choksi points out, October marked the very first month following the rollout of these incremental policies, and early outcomes were quite visible, with notable rebounds in major economic indicators. Key areas aligned with national strategies, enhancing security in essential sectors, large-scale equipment upgrades, and the replacement of consumer goods have demonstrated marked improvements.
Data released for October 2024 paints a mixed picture of the state of China’s economy. Sentiment among service providers and manufacturers has particularly improved, and export growth hit a two-year high as well. As per China’s Finance Minister, a “more forceful” fiscal policy is expected for next year. This policy may involve an expansion in special local bond issuance, an increase in the budget deficit, as well as freer use of the funds raised. He also suggested improved support for a cash-for-clunkers program in order to spur consumer spending. Government at all levels in China accelerated bond sales in the recent bonds. Net financing exceeded trillion yuan ($138 billion) for three straight months through October 2024.
