China’s Economy Defies Predictions with Strong Start in 2024 Amid Property Crisis

• China’s economy exceeded expectations with a 5.3% GDP growth in Q1 2024, despite deepening property crises.
• Property investment declined, reflecting the challenges faced by real estate firms amidst the ongoing crisis.

China’s economy made an unexpectedly solid start to 2024, even as property crises deepened further.

According to official figures, gross domestic product (GDP) expanded by 5.3% during the first three months of 2024 compared with same time last year.

According to analysts’ predictions, growth would slow to 4.6% during the first quarter. This exceeded all expectations that China may experience slowing economic expansion.

Last month, Beijing set an aggressive annual economic growth goal of up to 5 per cent in Asia’s second largest economy.

Data from China’s National Bureau of Statistics (NBS) also indicated first quarter retail sales growth was 3.1%, which measures consumer sentiment.

“To reach China’s target growth of around five percent,” Harry Murphy Cruise from Moody’s Analytics told BBC that China must see households join in its growth drive.

Property investment declined 9.5% year-on-year during that same timeframe, reflecting China’s real estate firms’ increasing difficulties.

As China grapples with an ongoing property market crisis, according to the International Monetary Fund (IMF), property accounted for around 20% of their economy in 2014.

Recent data also demonstrated new home prices decline at their fastest pace for over eight years in March.

Real estate crisis was highlighted this January when property giant Evergrande was ordered liquidate by a court in Hong Kong.

Country Garden and Shimao developers, two other prominent developers in the city, have also been served with winding-up petitions in an attempt to wind them up.

Last week, Fitch ratings agency downgraded China due to increased financial risks from economic challenges facing its economy.

At China’s annual gathering of leaders in March, officials reported a 5.2% economic expansion over 2023.

China’s economy experienced rapid expansion for years, with official estimates placing annual GDP growth near 10% annually.