China's economy is growing more than expected, Trump-Zölle worries worries

Von WOM

The Chinese economy grew more than expected in the last three months of 2024, as official data on Friday showed. This happened in the expectation of the possible introduction of new tariffs by the future US President Donald Trump, who will take office next week.

strong export and trade balance

A large part of the growth engine came from the exports that the Commercial surplus in the past year on the past year Record-suspect drove almost $ 1 trillion. However, this strength could attract Trump's resentment, which has announced that China could be occupied by 10 % of 10 % on all existing tariffs until it stops the flow of illegal drugs to the United States. During the presidential election campaign, he even threatened with tariffs of over 60 % on all Chinese imports.

Surprising birth rate and demographic problems

The National Bureau for Statistics (NBS) also revealed that China, which has to deal with demographic and economic problems, had an unexpected increase in the birth rate last year. This represents a turn to the declines that have been observed since 2017. Nevertheless, the total population has been declining for three years.

economic growth and future outlook

In the fourth quarter, the country's gross domestic product (GDP) grew by 5.4 %. This exceeded the forecasts of 5.0 %, which were given by a group of economists in a survey by Reuters, and represents an acceleration compared to the 4.6 % in the third quarter.

For the whole year, growth was 5.0 %, which was slightly over the 4.9 % of the Reuters forecast. According to the analysts of Goldman Sachs, the quarterly growth data and the industrial numbers of the past month "clearly" exceeded expectations.

Analysts expect that growth could fall to 4.5 % this year, "since the growth damage due to the probably higher US tariffs may have more than weighing up the continuous relaxation of the politics in view of the ongoing real estate mining and the weak consumer mood".

government measures to boost growth

The economic upswing made progress in the last months of 2024 after the Chinese leadership decided to implement a long overdue economic package, which mainly focused on monetary measures in the last weeks of September. Since then, the political decision-makers have taken a number of other measures, including a Extension of a "cash--for-clunker" program for household appliances like rice chef.

challenges of the population and future developments

Many experts believe that much more must be done to activate the huge group of consumers in the country who, after losses by the continued decline in real estate values, is estimated at around $ 18 trillion, according to the investment bank Barclays, offside.

In fact, some believe that the impending return of Trump and his possibly exorbitant tariffs could be exactly what is necessary to move the Chinese leadership to take more measures.

"The Chinese government has shown that it will do everything to compensate for the effects of tariffs," said Larry Hu, chief economist for China at Macquarie Group, in a research note on Wednesday. "Strong tariffs lead to strong stimulus and thus to better domestic demand."

decline in the population and age challenges

china faces a variety of printing factors, including a severe real estate crisis that has reduced the wealth of consumers and pressed budget expenses, as well as a demographic problem that will have a significant impact on future growth.

Last year, the country recorded 6.77 births per 1,000 people, an increase of 6.39 in the previous year, according to the NBS. A total of around 9.54 million babies were born, which corresponds to an increase of more than half a million compared to 2023

This is the first time that China has been an increase in newborns since 2016, when there was a short-term increase in the birth rate after the decades of decades. After the government has taken a number of measures to encourage young people to get more children, including the extension of maternity leave times and financial incentives, and the improvement in childcare. The year 2024 was also the year of the kite in the Chinese lunar calendar, a particularly cheap year for births.

Nevertheless, the total population fell by 1.39 million to 1.408 billion in 2024 and has therefore continued to fall since 2022, which resulted in India as the most populous country in the world.

The employment population, defined as people between the ages of 16 and 59, fell by 6.83 million last year, which contributes to a continuing decline. The population of over 60, on the other hand, continues to grow and now accounts for 22 % of the total population.

The rapid aging population and the shrinking employment population are a serious challenge for China's economic and social stability, since the country is confronted with the financing of health care and pensions for older citizens and at the same time wants to maintain growth.

In 2015, China announced the end of his decades of one-child policy, which allowed married couples to get two children, and increased this number to three children in 2021. Nevertheless, the birth rates continued to lower after there was a short -term increase.

The government has also undertaken to promote a “new marriage and birth culture” by encouraging young people to marry at “reasonable age” and get children and to share responsibility for childcare.

So far, these measures seem to have largely failed in young adults who struggle with high unemployment, rising living costs and a lack of social welfare support during the economic downturn. Many postpone wedding and births, and a growing number of young people even choose to avoid them completely.

This story was updated with additional information and context.