China‘s 2024 economic data: Full translation of press conference & my takeaways
my takeaways on youth employment and population decline, together with the full translation of Q&A session
On January 17, the State Council Information Office (SCIO) of China held a press conference to brief China’s economic performance of 2024.
Participants:
Kang Yi (康义), commissioner of the National Bureau of Statistics (NBS)
Fu Linghui (付凌晖), spokesperson of the NBS and head of the Department of Comprehensive Statistics of the NBS
As usual, the press conference has two parts. The first one introduces the main economic data for China in 2024, and the official English readout of the 2024 economic data is available on the official website of the NBS shortly after the press conference begins. The second part is the Q&A session.
Currently, there is no official English version of the Q&A session, so I translated it today. While analyses of key data, such as GDP and retail sales, are widely available in major media outlets, I would like to share some additional takeaways from my perspective.
Youth employment: It is nice to hear from the press conference that, the urban surveyed unemployment rate for the 16-24 age group, excluding students, has declined for four consecutive months. However, the key issue lies in that: structural mismatches in the job market persist and will likely continue. On one hand, graduates struggle to find jobs, while on the other, businesses report difficulties in hiring qualified candidates. In fact, a more accurate description would be that finding an “ideal” job has become increasingly challenging for today’s youth. Despite a notable shift in mindset among Gen-Z, many Chinese families still place a high value on “stability” when selecting a job. Thus you may better understand why there is a debate between two generations of scholars regarding today’s lifestyle, as I covered a few months ago.
Chinese Scholars on Life Today: Two Generations, Two Views
·Population decline: It comes as no surprise that China’s total population continued to decline this year. What is worth noting, however, is that the number of births in 2024 reached 9.54 million, an increase of 520,000 from the 9.02 million births in 2023. Part of this increase can be attributed to a surge in marriages in 2023, following the end of COVID-19 restrictions in late 2022 in China. Another possible reason is that children born in 2024 belong to the Year of the Dragon, which carries positive cultural connotations in China. On Xiaohongshu, or Rednote, which has gone viral among western countries, I came across this chart: the blue line represents the number of newborns, while the green line represents the number of new graduates:
Last year, the official readout reported that the average monthly income of migrant workers was 4,780 yuan, reflecting a 3.6% increase compared to the previous year. However, this year’s average monthly income has not been disclosed, and the reason for this remains unclear.
Below are the full translation of Q&A session.
Q&A:
National Business Daily:
The global economy in 2024 is still undergoing cyclical adjustments, with rising protectionism and ongoing geopolitical risks. In the face of multiple challenges, how has China’s economy performed overall? Have the major annual targets and tasks been achieved to a satisfactory extent? Thank you.
Kang Yi:
Thank you for the question. 2024 marks the 75th anniversary of the founding of the People’s Republic of China and is a key year for achieving the goals and tasks outlined in the 14th Five-Year Plan. Over the past year, despite increased external pressures and growing internal difficulties, the Party Central Committee, with Comrade Xi Jinping at its core, has united and led the people of all ethnic groups across the country with calm responses and comprehensive measures. The overall economic performance has been stable and progressing, high-quality development has been steadily advanced, and the major targets and tasks have been successfully achieved. China has taken solid steps forward in the process of modernization with Chinese characteristics. Looking back at this extraordinary year, I would like to summarize the overall economic performance with five “remarkably difficult” aspects.
First, under the conditions of increasing external pressures and growing internal difficulties, China’s total economy reached a new milestone, which was not easy. The international environment in 2024 was complex and challenging, with weak global economic growth momentum, escalating geopolitical conflicts, and intensifying trade protectionism. Domestically, there was a lack of effective demand, and the transformation from old growth drivers into new ones faced growing pains, with some industries and businesses experiencing considerable operational difficulties. In the face of these challenges, China’s economy held up under pressure, overcame difficulties, and achieved a new breakthrough in economic size, contributing to global development. In 2024, China’s GDP reached 134.9 trillion yuan, a first-time breakthrough of the 130 trillion yuan mark, growing by 5% compared to the previous year. Our economy remains firmly in second place globally. From a global perspective, China’s 5% economic growth rate ranks among the top among major economies and continues to be a key driver of global economic growth.
Second, the timely introduction of a package of incremental policies effectively boosted social confidence, particularly leading to a noticeable economic rebound, which was not easy. Due to various factors, China’s economic growth slowed in the second and third quarters of 2024, facing significant downward pressure. In response, the CPC Central Committee strengthened macroeconomic regulation in light of changing conditions and, on September 26, the Politburo made decisive plans for a package of incremental policies. This greatly boosted confidence, revitalized the economy, and promoted the economic rebound. In the fourth quarter of 2024, GDP grew by 5.4% year-on-year, accelerating by 0.8 percentage points compared to the third quarter. The growth rates of the total value added of industrial enterprises above the designated size, the total value added of service sector, and total retail sales of consumer goods accelerated by 0.7, 1.0, and 1.1 percentage points, respectively. The manufacturing PMI began to rise back into the growth zone starting in October, and the non-manufacturing business service index steadily improved, reaching 52.2% in December.
Third, during the process of overcoming challenges, significant progress in high-quality development has been achieved, which was not easy. China’s economy is at a critical juncture of transformation and upgrading. Despite the difficulties faced in moving forward, the country has steadfastly focused on high-quality development as its top priority, developing new quality productive forces in light of actual conditions, promoting new growth drivers, and upgrading traditional drivers. The economic structure has been optimized, and the momentum is shifting toward new drivers. Our industrial structure has undergone optimization and upgrading. In 2024, the value-added output of high-tech manufacturing and equipment manufacturing above the designated size accounted for 16.3% and 34.6% of the the total value added of industrial enterprises above the designated size, respectively, an increase of 0.6 and 1.0 percentage points compared to the previous year. New urbanization has also been steadily advancing, with the urbanization rate of the permanent population reaching 67.00% by the end of the year, an increase of 0.84 percentage points compared to the end of the previous year. The green and low-carbon transformation is accelerating, with preliminary calculations showing that in 2024, the share of non-fossil energy consumption in total energy consumption increased by 1.8 percentage points compared to the previous year. The achievements of high-standard opening up are also very evident, with the total import and export of goods reaching 43.8 trillion yuan, setting a new historical high.
Fourth, the efforts to stabilize employment, increase income, and ensure and improve people’s livelihoods have made steady progress, which was not easy. Ensuring the happiness of the people is the fundamental purpose of our development and is of the utmost importance. In 2024, all regions and departments implemented more robust measures to benefit the people, with greater efforts to stabilize employment and increase income. The annual urban surveyed unemployment rate averaged 5.1%, a decrease of 0.1 percentage points compared to the previous year. The per capita disposable income of residents grew by 5.1% in real terms, in line with economic growth. The scale of employment among people lifted out of poverty remained stable at over 30 million for the fourth consecutive year. Progress was also made in areas such as education, healthcare, elderly care, and child-rearing, improving the livelihoods of the people.
Fifth, ensuring both development and security, strengthening food and energy security, and effectively addressing risks in key areas has not been easy. In 2024, China’s grain output reached a historic high, surpassing 1.4 trillion jin (斤) for the first time. The total production of primary energy continued to increase, ensuring strong energy supply. The real estate policies were actively optimized, with concrete efforts to secure housing delivery, and new models for real estate development were explored. Since September, the real estate market has shown positive changes. In the fourth quarter, the sales area and sales value of newly built commercial housing grew by 0.5% and 1.0% year-on-year, respectively, reversing the previous declining trend. Targeted measures addressing risks in key areas, such as local government debt and small and medium-sized financial institutions, were gradually introduced and achieved tangible results, effectively consolidating the foundation for national security and development.
Overall, in 2024, China’s economy overcame various difficulties and challenges arising from complex domestic and external conditions and successfully achieved the major expected targets and tasks. It promoted significant qualitative improvements and reasonable quantitative growth in the economy, with high-quality development making remarkable progress, which was no easy feat. This is the result of the Party’s leadership and the united efforts of the people, reflecting the solid economic foundation, multiple advantages, strong resilience, and great potential, and it lays a solid foundation for achieving the goals and tasks of the 14th Five-Year Plan. Of course, we must also be clear-eyed about the deepening adverse impact of external factors, insufficient domestic demand, the operational difficulties faced by some enterprises, employment and income pressure on the population, and the ongoing risks and hidden dangers. Achieving further economic recovery will require strenuous efforts. Going forward, we must, in accordance with the decisions and arrangements made by the Central Economic Work Conference, face the difficulties, maintain confidence, focus on action, and turn favorable factors into concrete achievements in development, continuously driving the economy towards sustained improvement.
Thank you.
Russian News Agency TASS:
Since September of last year, China has introduced a series of policy measures, including those aimed at promoting consumption and investment. How have these policies been reflected in the economic data? What role have they played in achieving the annual goals and tasks? Thank you.
Kang Yi:
Thank you for your question. The economic development in China in 2024 has been truly extraordinary. The first quarter saw a good start, but in the second and third quarters, the pressure on economic operations increased, and new situations and problems emerged. In the face of these new challenges, the CPC Central Committee, with Comrade Xi Jinping at its core, assessed the situation and made decisive moves. On September 26, the Political Bureau of the CPC Central Committee made a significant decision to effectively implement existing policies and intensify the introduction of incremental policies, which greatly boosted confidence, improved expectations, and energized development momentum. As a result, the economy showed a noticeable rebound in the fourth quarter. Preliminary calculations show that in the fourth quarter, GDP grew by 5.4% year-on-year, accelerating by 0.8 percentage points from the third quarter, making a decisive contribution to the successful achievement of the annual economic development goals. Key indicators such as production, demand, prices, income, and expectations have all shown positive changes.
First, both consumption and investment are accelerating. In terms of consumption, the total retail sales of consumer goods in the fourth quarter grew by 3.8% year-on-year, accelerating by 1.1 percentage points compared to the 2.7% growth in the third quarter. The policy to encourage consumer goods trade-in programs played a significant role, with retail sales of household appliances, audio and video equipment, furniture, automobiles, and building and decoration materials from units above a designated size contributing about 1 percentage point to the overall growth of social retail sales. In terms of investment, encouraged by projects for implementing major national strategies and building security capacity in key areas, as well as large-scale equipment renewal, infrastructure investment in 2024 grew by 4.4%, accelerating by 0.3 percentage points compared to the first three quarters. Investment in the purchase of equipment and tools grew by 15.7%, an acceleration of 9.1 percentage points from the previous year, driving a 2.2 percentage point increase in total investment.
Second, both the industrial and service sectors saw a notable recovery. The expansion of market demand promoted industrial production growth and accelerated the growth of the service sector. In terms of industry, the total value added of industrial enterprises above a designated size grew by 5.7% year-on-year in the fourth quarter, accelerating by 0.7 percentage points compared to the third quarter. Among this, the value-added output of equipment manufacturing industries above a designated size grew by 8.1%, accelerating by 1.1 percentage points from the third quarter, driven by the equipment renewal policy. The capacity utilization rate also improved, with the industrial capacity utilization rate for enterprises above a designated size rising to 76.2% in the fourth quarter, an increase of 1.1 percentage points compared to the third quarter. As for the service sector, the value added of the service industry grew by 5.8% year-on-year in the fourth quarter, accelerating by 1 percentage point compared to the third quarter. Specifically, the total value added of wholesale and retail industries, transportation, warehousing and postal industries, and the financial industry grew by 5.7%, 7.9%, and 6.5%, respectively, accelerating by 0.7, 1.3, and 0.3 percentage points, while the total value added output of the real estate industry reversed from a 1.2% decline in the third quarter to a 2% growth, turning from negative to positive.
Third, the price situation showed positive changes. The recovery in market demand led to a rise in prices. In terms of the consumer price index (CPI), while the overall CPI growth in the fourth quarter eased slightly, mainly due to the decline in food prices, the core CPI, which better reflects supply and demand conditions, continued to rise. Since the fourth quarter, the core CPI, excluding food and energy, has risen for three consecutive months, with a 0.4% increase in December. Regarding industrial product prices, the improvement in industrial production and sales also helped stabilize prices. In November and December, the Producer Price Index (PPI) decline narrowed for two consecutive months, with the decline narrowing by 0.4 and 0.2 percentage points, respectively, compared to the previous month.
Fourth, the income of enterprises, residents, and the government has improved. The economic recovery has driven improvements in the income of the three main sectors: enterprises, residents, and the government. In 2024, the per capita disposable income of residents grew by 5.1% in real terms compared to the previous year, accelerating by 0.2 percentage points from the first three quarters. The performance of enterprises has also seen marginal improvements. In October and November, the total profits of industrial enterprises above a designated size showed a narrowing of the year-on-year decline, with the decrease shrinking by 17.1 and 2.7 percentage points, respectively, compared to the previous month. Fiscal revenue has also gradually improved. Since September, the growth rate of fiscal revenue turned positive, and it showed continuous improvement in October and November.
Fifth, market activity has increased. The combined effect of policies has been continuously released, with higher activity in the stock market, real estate market, and cargo transport, an increase in money supply, and enhanced economic vitality. In the fourth quarter, the sales area and sales value of newly built commercial housing achieved positive year-on-year growth. The transaction volume and value of stocks on the Shanghai and Shenzhen stock exchanges grew by 1.1 times and 1.6 times, respectively, compared to the third quarter. The total cargo transport volume for the year grew by 3.9%, with the growth rate accelerating by 0.6 percentage points compared to the first three quarters. By the end of December, the broad money supply (M2) grew by 7.3% year-on-year, accelerating by 0.5 percentage points from the end of September.
Sixth, market expectations are warming up. The recovery and improvement in economic operations have led to increased confidence and expectations across various sectors. Since the fourth quarter, the Manufacturing PMI and the Services Business Activity Index have both remained in the expansionary zone, above 50%. Specifically, in December, the Manufacturing PMI for production and business activity expectations was 53.3%, and the Services Business Activity Expectations Index was 57.6%, both at relatively high levels.
In particular, key indicators in December show an even more obvious economic recovery. In December, the total value added of industrial enterprises above a designated size, the service sector production index, and the total retail sales of social consumer goods all grew by 6.2%, 6.5%, and 3.7%, respectively, year-on-year, accelerating by 0.8, 0.4, and 0.7 percentage points compared to the previous month. Among these, the industrial growth rate was the highest since the second half of the year, the service sector production index showed the highest growth rate of the year, and the industrial production and sales ratio for large enterprises rose to 98.7%, a high level.
Overall, after the Political Bureau meeting on September 26, the package of incremental policies introduced effectively stimulated development vitality, expanded market demand, boosted enterprise production, increased market activity, and enhanced development confidence. These measures played a decisive role in the economic rebound in the fourth quarter and the successful achievement of annual target of 2024. Moving forward, we need to fully implement the spirit of the Central Economic Work Conference, adopt even more proactive and impactful macro policies, and ensure a smooth policy transition into the new year to provide stronger support for stable economic operation and sustained recovery.
Thank you.
CCTV:
In 2024, China’s total economy surpassed 130 trillion yuan (roughly USD 18 trillion) for the first time. What does this signify? How do you view these new changes? Thank you.
Kang Yi:
Thank you for your question. In 2024, China’s total economy exceeded 130 trillion yuan, which is an extraordinary achievement. This signifies that China’s economic strength, technological capabilities, and composite national strength have reached a new level. It also means that the foundation for China’s development is stronger, the conditions are more favorable, the momentum is more robust, and the ability to withstand risks has increased. Furthermore, it indicates that China has made new and important contributions to global development. Specifically:
First, it means that China’s economic foundation is now even more solid. Since the 18th National Congress of the Communist Party of China, China’s economy has broken through a 10 trillion yuan milestone approximately every 1-2 years. We surpassed 100 trillion yuan in 2020, followed by surpassing 110 trillion yuan in 2021 and 120 trillion yuan in 2022. In 2024, we have exceeded 130 trillion yuan. Over the past decade, China has achieved a historic leap from over 50 trillion yuan to over 130 trillion yuan, significantly enhancing its composite national strength. In 2024, the increase in China’s economy alone is comparable to the annual economic output of a medium-sized country. The productive forces in China has significantly improved, with the value added of the secondary and tertiary industries reaching 49.2 trillion yuan and 76.6 trillion yuan, respectively. China's production of new energy vehicles surpassed 13 million units, and the production of mobile phones exceeded 1.6 billion units, maintaining China’s position as the world’s largest manufacturer.
Second, it means that China’s advantages in its enormous market scale and complete industrial system have been further consolidated. The world is undergoing unprecedented changes at an accelerated pace, with increasing external instability and uncertainty. The strong economic foundation, the advantages of vast market, and the complete industrial system remain China's greatest strengths in facing risks and challenges. In 2024, China’s total retail sales of consumer goods and investment in fixed assets reached 48.8 trillion yuan and 51.4 trillion yuan, respectively. The role of domestic demand as the main driver continues to be fully realized. China’s goods trade, foreign exchange reserves, and manufacturing scale are the largest in the world, while its service trade and domestic consumption market are the second largest. The country’s ability to ensure food and energy security has been strengthened, and new infrastructure such as 5G, computing power, and energy storage is being rapidly deployed. Efforts to shore up weak links in the industrial and supply chains of key industries have been steadily advanced, and the foundation for secure development is being firmly consolidated.
Third, it means that China continues to make positive contributions to global prosperity and development. Over the years, China has contributed around 30% to global economic growth annually, making it the largest driver of global economic growth. China remains steadfast in promoting high-standard opening up, introducing more autonomous and unilateral open policies, expanding its high-standard free trade zone network globally, and maintaining its position as the world’s second-largest import market for several consecutive years. In 2024, the value of China’s goods imports reached 2.6 trillion USD, providing new opportunities for global cooperation and openness through its vast market.
At the same time, we must also recognize that China is still the world’s largest developing country. Its per capita GDP still lags significantly behind that of developed countries, and issues such as unbalanced and insufficient development remain prominent. Achieving Long-Range Goals for 2035 will require tremendous efforts. We must fully, accurately and faithfully apply the new development philosophy on all fronts, accelerate efforts to foster a new pattern of development, always remember that high-quality development is the key principle for the new era, and move forward with determination and resilience toward the goal of Chinese modernization.
Thank you.
Red Star News:
In the past year, both the central and local governments have introduced a series of measures to stabilize the real estate market. What effect have these combined efforts to stabilize the market and prevent further decline had? How do you assess the future trends of the real estate market? Thank you.
Kang Yi:
Thank you for your question. Real estate is a matter of great concern because it is closely linked to economic development and the improvement of people’s livelihoods. In 2024, in response to the complex situation in the real estate market, the Political Bureau meeting on September 26 explicitly proposed to “promote the stabilization and recovery of the real estate market.” Multiple departments worked quickly to improve policies related to land, taxation, and finance. They removed restrictions on purchasing, selling, pricing, and the classification of ordinary and non-ordinary residential properties, as well as reduced the interest rates for housing provident fund loans, the down payment ratio for housing loans, the interest rates on existing loans, and the tax rates for upgrading homes. Together, these measures formed a comprehensive policy package. Local governments also adopted specific policies, applying precise measures tailored to individual cities. The effects of these policies are becoming increasingly evident in several areas.
First, market transactions have become more active. The continuous rollout of the policy package effectively lowered the threshold for residents to purchase homes and reduced the pressure of loan repayments, leading to an increase in residents’ willingness to buy homes and an improvement in real estate sales. In the fourth quarter, both the sales area and sales value of newly built commercial housing saw positive growth. In 40 key cities monitored for sales performance, the sales area and sales value of newly built commercial housing in December increased by 0.3% and 4.1%, respectively, year-on-year.
Second, housing prices have gradually stabilized. With the continued release of people’s demand for buying their first home or improving their housing situation, the supply-demand relationship in the market has improved, leading to a stabilization in housing prices. In December, among 70 large and medium-sized cities, 23 cities saw a month-on-month increase in the sales prices of newly built commercial housing, and 9 cities saw a month-on-month increase in the prices of second-hand housing. Specifically, the sales prices of newly built commercial housing in first-tier cities increased by 0.2% month-on-month, marking the first increase since June 2023, while the sales prices of second-hand housing rose by 0.3% month-on-month, continuing a three-month streak of month-on-month increases. In second-tier cities, the month-on-month sales prices of newly built commercial housing shifted from a decline last month to being flat. In third-tier cities, the month-on-month price decline for newly built commercial housing has been narrowing for four consecutive months. Year-on-year, the price decline in all tiers of cities for commercial housing has also been narrowing.
Third, market expectations have continued to improve. With the cumulative effect of policies being released, key indicators of the real estate market have consistently improved, driving a gradual increase in market confidence. In December, a monthly survey of housing prices conducted in 70 large and medium-sized cities showed that 69.3% of surveyed industry practitioners expected the prices of newly built commercial housing to remain stable or rise in the next six months, an increase of 0.8 percentage points from the previous month.
Fourth, related sectors in real estate have also shown improvements. The recovery in the real estate market has driven improvements in related industries. In December, the business activity expectations index for the construction industry increased by 1.5 percentage points compared to the previous month, marking the third consecutive month of improvement. As transactions of commercial housing improved, the demand for decoration and renovation gradually released, leading to better sales of furniture, building materials, and other related goods. In December, retail sales of furniture in units above a designated size grew by 8.8% year-on-year, marking four consecutive months of positive growth. Sales of building and decoration materials increased by 0.8%, continuing their growth for the second consecutive month.
Overall, recent positive changes in the real estate market, driven by the policy package, have led to increased market confidence. With the effective implementation of both existing and incremental policies, the real estate market is expected to continue improving in the next phase. In the medium to long term, China’s new urbanization is still underway, and there is still potential demand for people to buy their first home or improving their housing situation. The demand for more safe, comfortable, green, and smart homes will continue to rise, and a new model for the development of the real estate market will gradually take shape, helping to ensure the stable and healthy development of the market.
Thank you.
Market News International:
The recently released CPI growth for China last year was 0.2%. Moreover, we noticed that the core CPI in December slightly increased to 0.4%, the highest level in five months. How does the NBS view the inflation performance last year? How do you assess the inflation outlook for 2025, and what measures will be taken to ensure inflation aligns with the official target? Thank you.
Fu Linghui:
Thank you for your question. Price issues are of great concern as well. Looking at the situation in 2024, the CPI showed a slight increase, rising by 0.2% for the year, which is the same as the increase in 2023. From a monthly perspective, except for a slight decrease in January, the CPI year-on-year showed a slight upward trend in all other months. To assess the CPI, we must look at the overall data, structural changes, and dynamic trends.
First, in 2024, the CPI showed overall structural characteristics. The CPI increase was heavily influenced by the decline in food and energy prices, while the core CPI, excluding food and energy, remained relatively stable. Regarding food prices, some regions were affected by extreme weathers, but overall, the supply of staple foods such as grains, oil, meat, eggs, and vegetables remained sufficient, and food prices remained stable with slight decreases. In 2024, food prices decreased by 0.6% compared to the previous year, contributing to a 0.11 percentage point decrease in the CPI. Specifically, prices for edible oil, beef, lamb, eggs, and fresh fruit dropped by 3.5% to 11.6%. As for energy prices, due to the weaker growth momentum in the global economy, prices for international commodities like crude oil, while fluctuating monthly, generally declined, which led to a downward trend in domestic energy prices. In 2024, energy prices within the CPI decreased by 0.1% compared to the previous year, with gasoline and diesel prices falling by 0.7% and 0.8%, respectively. In contrast, the core CPI, which better reflects supply and demand conditions, remained stable. In 2024, the core CPI increased by 0.5% year-on-year, with service prices rising by 0.7%. Particularly since the fourth quarter, with the recovery of consumer demand, the year-on-year increase in core CPI has been gradually rising, showing a mild monthly increase for three consecutive months.
Additionally, the favorable factors supporting a moderate recovery in the CPI are increasing. As existing policies and a package of incremental policies work together, the momentum for economic recovery is strengthening, consumer demand is recovering at an accelerated pace, and factors that favor a gentle price increase are multiplying. Looking ahead, with the upcoming Spring Festival holiday, food consumption demand will rise, and service consumption such as dining out, visiting relatives, and tourism will become more active, helping to drive the seasonal increase in CPI. Based on preliminary data for January, prices for vegetables, fresh fruits, airfares, and tourism services are rising steadily, and the year-on-year CPI growth in January is expected to widen. Meanwhile, overall expectations among businesses and residents are improving, which also supports a moderate recovery in the CPI. In December, the expected index for manufacturing production and business activity was 53.3%, and for services, it was 57.6%, both above the neutral point. The consumer confidence index increased by 0.2 percentage points compared to the previous month.
It is also important to note that the Central Economic Work Conference has prioritized “greatly boosting consumption, improving investment efficiency, and expanding domestic demand in all areas” for the 2025 economic agenda. For the first time, it explicitly stated the goal of achieving a balanced combination of “stable growth, stable employment, and a reasonable recovery in prices.” We believe that with the further implementation of macro policies, a better policy environment will be created to support economic growth and a reasonable recovery in prices. As a result, the CPI in 2025 is expected to rise moderately.
Thank you.
Dazhong Daily:
In the past year, the central government has placed great emphasis on cultivating new quality productive forces, with various regions and departments making a series of deployments. From the data, what tangible effects have these new productive forces had in driving high-quality economic development? Thank you.
Kang Yi:
Thank you for your question. Developing new quality productive forces is an intrinsic requirement and an important focus for driving high-quality development. In 2024, efforts were made across all sectors to actively promote the deep integration of technological innovation and industrial innovation, vigorously making traditional industries higher-end, smarter, and more eco-friendly, and facilitating the conversion of technological creativity into productive forces. China’s new quality productive forces have steadily developed, injecting continuous new momentum into high-quality development. This is reflected in several key areas:
First, innovation capacity has further improved. The foundational systems and frameworks supporting comprehensive innovation are being strengthened, and the construction of major scientific and technological infrastructure is continually advancing. Significant progress has been made in fields such as integrated circuits, artificial intelligence, quantum communication, and aerospace. Notably, the Chang'e-6 lunar probe collected samples from the far side of the moon, and the Mengxiang drilling vessel explored the mystery of the deep ocean, constantly setting new records for China’s scientific and technological achievements. In 2024, China’s global innovation index ranked 11th, making it one of the fastest-growing economies in terms of innovation over the past decade. Our investment in research and development (R&D) has also been steadily increasing. In 2024, the R&D expenditure intensity reached 2.68%, an increase of 0.1 percentage points from the previous year. Funding for basic research grew by 10.5%, accounting for 6.91% of total R&D expenditure.
Second, emerging industries are further expanding. Emerging industries, represented by high-end equipment and artificial intelligence, are showing positive development trends, and new pillars of the industrial system are gradually taking shape. In 2024, the value-added output of high-tech manufacturing industries above a designated size increased by 8.9% compared to the previous year. Within this, the aerospace equipment and device manufacturing industry and the electronics and communication equipment manufacturing industry both achieved double-digit growth. New market demands are continually driving the supply of more high-quality products. In 2024, in high-tech manufacturing industries above a designated size, the value-added output of the smart consumer device manufacturing industry grew by 10.9% compared to the previous year, with industries such as smart vehicle equipment manufacturing and smart unmanned aerial vehicle manufacturing seeing increases of 25.1% and 53.5%, respectively.
Third, traditional industries are further upgrading. China is accelerating the technological transformation and equipment updates in the industrial sector, continuously revitalizing traditional industries. In 2024, investment in technological transformation in the manufacturing sector grew by 8%, significantly outpacing the growth rate of total investment. As key areas for the optimization and upgrading of traditional industries, the raw materials industry and the level of process technology and equipment have been steadily improving, with the green and digital transformation accelerating. In 2024, energy consumption per unit of added value in major energy-consuming industries, such as chemicals, building materials, steel, and non-ferrous metals, in industrial enterprises above a designated size, declined compared to the previous year. By the end of the year, the numerical control rate of key processes in these raw materials industries exceeded 75%, achieving the goals outlined in the “14th Five-Year Plan” ahead of schedule.
Fourth, the digital economy is further growing. The continuous development of digital technologies, digital infrastructure, and data resources is enabling the digital economy to empower various industries and has become a crucial support and key engine for the development of new quality productive forces. In 2024, the value-added growth rate of digital product manufacturing industries above a designated size significantly outpaced that of overall industry. The value-added output of information transmission, software, and IT services grew by 10.9% compared to the previous year. New digital consumption models and scenarios are constantly expanding, driving a 6.5% increase in online retail sales of physical goods. Network infrastructure construction, such as 5G and gigabit optical networks, is steadily progressing. By the end of November 2024, China’s number of 5G base stations reached 4.19 million. The first 400G all-optical inter-provincial backbone network under a project to channel more computing resources from the eastern areas to the less developed western regions was officially put into commercial operation, establishing a high-speed computing power channel.
Fifth, green development has further achieved results. China’s green and low-carbon transformation continues to deepen, with the development of the new energy industry showing outstanding results. China has built a globally competitive full industry chain system for new energy. The greening of the energy sector is accelerating, with the share of clean energy in power generation continuously rising. In 2024, the share of hydroelectric, nuclear, wind, and solar power in the value-added output of large-scale industrial enterprises increased to 32.6%, nearly one-third.
In addition, China is actively positioning itself for future industries. Quantum technology and the low-altitude economy are accelerating toward realization. The third-generation indigenous superconducting quantum computer, “Wukong,” has been launched, and the market for humanoid robots is steadily expanding. Various fields are quickly entering new economic development tracks, and new quality productive forces continue to empower high-quality development.
Thank you.
Reuters:
Could you provide an outlook for economic development in 2025? With exports potentially facing challenges this year, how can domestic demand, particularly consumption, be boosted? Additionally, I am interested in an analysis of the potential growth rate—what is its current level and what are the expected trends for the future? Thank you.
Kang Yi:
Let me start with the potential growth rate. The potential growth rate is a research-based concept that reflects the economy’s growth capacity. Different scholars, based on different methods and assumptions, may arrive at varying estimates. Based on recent studies from most institutions and scholars, China’s current potential growth rate remains at a moderate-to-high level. Due to the variations in methods, parameters, and assumptions, the results are not always consistent, but the overall conclusion is that the potential growth rate for China’s economy is at a moderate-to-high level.
Now, to answer your question about the outlook for 2025. 2025 will be the final year of China’s 14th Five-Year Plan. While external changes may deepen the adverse impacts, China’s economic foundation is stable, its advantages are many, its resilience is strong, and its potential remains large. The long-term supporting conditions and basic trends for positive growth have not changed, and the momentum for high-quality economic development remains intact. The favorable conditions outweigh the unfavorable factors, and the timing and momentum for development are still in China’s favor. We are confident about China’s economic development in 2025. This confidence is based on the following factors:
First, there is a solid foundation for continued economic improvement, with positive factors accumulating to drive growth. The economic development journey in 2024 has been extraordinary, with a significant recovery in the fourth quarter. Market activity and expectations have continuously improved, and the positive factors driving the economy’s ongoing improvement have been steadily accumulating, laying a good foundation for economic growth in 2025. China is an enormous economy, with a vast economic scale, large market capacity, and a complete industrial system, as well as strong supporting capabilities. Both supply and demand can sustain the domestic circulation, which serves as the fundamental support for the stability and long-term growth of China’s economy. For example, looking at some production indicators, in the each day of 2024, China produced more than 80,000 vehicles, 3.4 million smartphones, and delivered over 470 million express parcels. These figures demonstrate the vitality of the Chinese market, which is visible to all.
Second, there is dynamic momentum for continued improvement, with new driving forces and advantages growing stronger. China is at a critical stage of transformation from old growth drivers into new ones, with some traditional drivers, such as real estate, weakening and their share of the national economy declining. However, new growth drivers, such as the digital economy, are thriving and their share is continuously increasing, providing more possibilities for expanding new spaces and creating new opportunities. In 2024, the real estate industry accounted for 6.3% of GDP, a decrease of 0.5 percentage points compared to 2023. Looking at the digital economy, the official data for 2024 has not been released yet, but in 2023, the value-added output of China’s digital economy accounted for 31.8% of GDP, an increase of 1.3 percentage points from 2022. Within that, the core digital economy industries contributed 9.9% of GDP, an increase of 0.5 percentage points from 2022. The share of the digital economy will further increase in 2024, as it has already become the new engine and driving force behind China’s economic development.
Third, there is strong support for continued economic improvement, and the effects of the policy package will gradually become evident. In particular, the Central Economic Work Conference has accurately assessed the major issues currently faced and provided solutions, outlining the direction for economic work in 2025. The policy focus is very clear: to drive sustained economic recovery and improvement while continuously raising the living standards of the people. In the face of complex external changes and domestic challenges such as insufficient effective demand, the primary task for economic work in 2025 is to comprehensively expand domestic demand, with a particular emphasis on boosting household consumption. This addresses the concern raised by the media regarding the stimulation of consumption. The Central Economic Work Conference has explicitly proposed measures such as “implementing special actions to boost consumption,” “strengthening and expanding the ‘two new’ policies,” and “increasing support for ‘dual-heavy’ projects.” The implementation of these policies will effectively unleash the potential of domestic demand, especially boosting household consumption, providing stronger demand-driven momentum for the stable and positive development of the economy this year.
Fourth, the continued improvement in the economy is also fueled by vitality, with deeper reforms and opening up enhancing developmental momentum. Reform and opening up are the driving forces behind China’s development and progress, and they are crucial tools for advancing in step with the times. The Third Plenary Session of the 20th Central Committee of the CPC proposed over 300 reform measures, and the Central Economic Work Conference clearly stated the need to “resolutely deepen reforms and expand opening up to address deep-rooted obstacles to development and external challenges.” These reform initiatives are steadily being implemented and will further unleash and develop productive forces, stimulating and enhancing economic vitality.
Additionally, 2025 is the final year of the 14th Five-Year Plan, and various sectors are focused on meeting targets and ensuring effective implementation. Major strategic tasks and projects will be fully realized, providing stronger momentum for economic growth. China has extensive experience in macroeconomic regulation, its enterprises are bold and enterprising, and its people are hardworking and intelligent. These factors enhance our confidence and ability to drive high-quality development and face risks and challenges. Moving forward, through focused reforms and robust policies, we will fully unleash the potential for development, successfully completing the goals of the 14th Five-Year Plan, and laying a solid foundation for a strong start to the 15th Five-Year Plan.
Thank you.
CNBC:
Could you please share any changes you have observed in employment, particularly regarding youth employment? Thank you.
Fu Linghui:
Employment is a key issue, which is the foundation of people’s livelihoods and the source of income. The CPC Central Committee places great importance on this issue, always prioritizing job stability and expansion in the economic and social development agenda. Despite facing numerous challenges in the economy in 2024, with some businesses encountering operational difficulties, the national economy has generally remained stable and made progress, with economic scale expanding. The service sector’s capacity for employment continues to play a key role, and with the development of new business forms, models, and industries, the driving force for employment has strengthened, contributing significantly to the stability of the job market. Moreover, employment-first policies are continuously being implemented, and these factors have collectively supported overall employment stability in 2024.
Overall, the national urban surveyed unemployment rate in 2024 showed a slight decrease. The average urban surveyed unemployment rate for the year was 5.1%, down by 0.1 percentage points compared to the previous year. In terms of quarterly data, the rates for the four quarters were 5.2%, 5.0%, 5.2%, and 5.0%, maintaining a relatively stable trend. The 5.1% average for the year is relatively low compared to recent years, indicating that the overall employment situation has remained stable.
Looking at key groups, the employment situation for major groups has improved. For example, the employment situation for migrant workers, young people, and those facing employment difficulties has shown overall improvement. Specifically, for migrant workers, the average urban surveyed unemployment rate for agricultural household workers from outside cities in 2024 was 4.6%, a decrease of 0.3 percentage points from 2023. The total number of migrant workers in 2024 increased by 2.2 million, a growth of 0.7%. Additionally, following the graduation season, employment pressure for young people eased after August, with the unemployment rate for 16-24-year-olds (excluding students) in December decreasing by 0.4 percentage points from the previous month, marking a four-month consecutive decline. Regarding those facing employment difficulties, by the end of 2024, the number of employed people from poverty-stricken populations exceeded 33 million, surpassing the annual target. This marked the fourth consecutive year of more than 30 million people employed in this group.
In the past year, the economy did face some challenges, but the stability of employment can largely be attributed to the expansion of the overall economy, which naturally requires corresponding increases in employment. Additionally, the service sector has a large capacity for employment, and over the years, the service sector has played a very important role in stabilizing employment. In 2024, the proportion of the service sector in GDP continued to rise, increasing by 0.4 percentage points from the previous year, reaching 56.7%. In terms of annual average employment in the service sector, 2024 saw an increase of more than 7 million people compared to the previous year. Among these, the wholesale and retail, accommodation and catering, information transmission, leasing, and business services industries saw the largest increases in employment. In addition to the expansion of the overall economy and the growth of the service sector’s employment capacity, the continued implementation of employment-first policies has played a significant role in stabilizing the employment situation. Last year, the CPC Central Committee of the Communist Party and the State Council issued the “Opinions on Implementing the Employment-First Strategy to Promote High-Quality and Sufficient Employment,” and various regions actively implemented actions to promote employment in advanced manufacturing sectors. These policies provided important support for stabilizing employment.
It is indeed important to note that there are challenges in the current economic environment, particularly with structural employment issues, where certain groups, such as young people, face significant difficulties and pressures in finding jobs. Stabilizing employment will require continued efforts. In response, the Central Economic Work Conference specifically emphasized the need to “taking a target-oriented approach, and achieving an optimized mix of stable growth, stable employment and reasonable price rebounds.” Moving forward, to this end, we must place even greater emphasis on promoting high-quality and sufficient employment, implement targeted employment support plans in key sectors, industries, urban and rural primary-level areas, and small and medium-sized enterprises, promote employment for key groups, and ensure the overall stability of the employment situation.
Thank you.
The Cover:
The Central Economic Work Conference emphasized the need to vigorously boost consumption. How has the overall consumption situation in China been in 2024? How do you view the current weakness in the consumption market? Will the consumption situation improve in 2025? Thank you.
Kang Yi:
Thank you for your question. Consumption is indeed a widely concerned issue. In 2024, various regions and departments have been intensifying the implementation of policies to expand domestic demand and promote consumption, stabilizing and expanding household consumption. Since the fourth quarter, the policy to encourage trade-in programs has been further expanded, and its effects are continuously becoming apparent, with significant growth in market sales, which has helped to drive the economic recovery. There are several key characteristics:
First, the market size continues to expand. In 2024, total retail sales of consumer goods reached 48.8 trillion yuan, a 3.5% increase compared to the previous year, maintaining China’s position at the forefront of global markets. In the fourth quarter, retail sales grew by 3.8% year-on-year, accelerating by 1.1 percentage points compared to the third quarter. In terms of contribution to economic growth, final consumption expenditure drove 2.2 percentage points of economic growth for the year. Specifically, in the fourth quarter, it contributed 1.6 percentage points, an increase of 0.2 percentage points compared to the third quarter.
Second, the impact of the trade-in programs has been significant. In 2024, the central government allocated 1.5 trillion yuan in ultra-long-term special government bond funds to support local governments in implementing the trade-in programs for consumer goods, tailored to local conditions. Retail sales of household appliances and audiovisual equipment in units above a designated size increased by 12.3%, accelerating by 11.8 percentage points compared to the previous year. For the year, furniture sales grew by 3.6%, accelerating by 0.8 percentage points. Since the second half of last year, the old-for-new policy has been increasingly implemented, and in recent months, sales of household appliances, automobiles, and other goods have accelerated, significantly driving the overall recovery in consumption.
Third, the role of new engines for service consumption is prominent. There is a clear trend toward more personalized, diversified, and higher-quality consumer spending. Consumption patterns are shifting from being primarily goods-focused to balancing both goods and services. Service consumption is increasingly becoming an important direction for the optimization and upgrading of consumption structure. In 2024, the proportion of per capita service consumption expenditure in total per capita consumption increased by 0.9 percentage points compared to the previous year. Retail sales of services grew by 6.2%, outpacing the growth rate of goods sales. Cultural and tourism consumption remains strong, information consumption is flourishing, and retail sales in transportation, travel services, and communication services all maintained double-digit growth.
Fourth, the potential of new types of consumption is accelerating. New consumption formats such as online sales and instant retail are gaining momentum. In 2024, online retail sales of physical goods grew by 6.5% compared to the previous year, driving the volume of express deliveries to new historical highs. At the same time, domestic products, domestic trends, and products with Chinese cultural characteristics are becoming increasingly popular. New business formats and models such as digital cultural tourism, live-streaming commerce, and online fitness are emerging in abundance. New scenarios such as smart homes and wearable devices continue to expand, showing strong growth potential. In particular, the retail sales of high-energy-efficiency and smart home appliances continue to grow at double-digit rates.
Of course, we must also acknowledge that household consumption capacity and willingness remain insufficient, and consumer demand does indeed require further stimulation. Looking to the future, there are favorable conditions to support sustained growth in consumption. First, policies to promote consumption will continue to strengthen, and the Central Economic Work Conference has further emphasized the need to expand domestic demand in all areas, which will unleash more policy effects. Second, the overall stability of the employment situation lays the foundation for increased household income. Efforts to boost the income and reduce the burdens of middle- and low-income groups will help enhance household consumption capacity. Third, new consumption scenarios and business formats will continue to expand. Recently, many regions have been seizing the opportunities presented by the “ice and snow boom,” vigorously promoting winter sports consumption. Additionally, new growth drivers such as the “debute economy” and senior citizen tourism are gradually forming, all of which will support positive consumption development. Fourth, China’s advantage of an enormous market continues to emerge. With a population of over 1.4 billion and a continuously rising urbanization rate, the potential for consumption remains immense, providing strong support for steady growth in consumption.
Moving forward, we must fully implement the decisions and arrangements of the Central Economic Work Conference, implement targeted actions to boost consumption, enhance the income and reduce the burdens of middle- and low-income groups, improve consumption capacity, willingness, and levels, innovate and diversify consumption scenarios, and expand service consumption.
Thank you.