Growth in China Fueled by Increased Domestic Demand
China is projected to reach a growth target of approximately 5 percent in 2024, bolstered by proactive policy initiatives and strong consumer demand within the domestic economy.
TroibNews 
Editor's note: Xue Tianhang is an associate researcher at the Research Center for Regional Coordinated Development, Zhejiang University. The article reflects the author's opinions and not necessarily the views of CN. It has been translated from Chinese and edited for brevity and clarity.
In 2024, global economic growth experienced a slowdown due to escalating regional conflicts, trade tensions, and increasing debt issues in several countries. The International Monetary Fund's latest forecast in October projected a global economic growth of 3.2 percent for 2024, lower than the 3.3 percent registered in 2023 and below the pre-pandemic average.
Amid these challenging global economic and trade conditions, China's economic strengths became even more apparent in 2024, showcasing its solid foundation, numerous advantages, resilience, and substantial potential. The country not only effectively addressed various challenges but also witnessed economic recovery and improvements despite some fluctuations. China is on track to reach a growth target of around 5 percent for the year. The domestic consumer market is on the mend, with a clear trend toward consumption upgrading, making domestic demand a crucial driver for economic growth. Particularly after the government implemented a series of incremental policies in September 2024, market confidence was revitalized, leading to increased resilience and vitality in the consumption sector.
First, consumption scales reached historic highs. Recent data from the National Bureau of Statistics indicates that consumption continued to grow in 2024. From January to November, total retail sales of consumer goods reached 44.3 trillion yuan, reflecting a 3.5 percent year-on-year increase. Policies like goods trade-in programs and consumption vouchers, alongside year-end shopping and promotional events, helped sectors such as home appliances, audiovisual equipment, furniture, and automobiles show remarkable performance in the fourth quarter. Specifically, retail sales in these categories surged in November by 22.2 percent, 10.5 percent, and 6.6 percent year-on-year, respectively.
Second, the service consumption sector exhibited rapid growth, highlighting people's desires for better living standards and higher-quality consumption options. From January to November, retail sales in the service sector increased by 6.4 percent year-on-year, surpassing goods retail growth by 3.2 percentage points. Additionally, the proportion of per capita consumption expenditure on services within total consumption expenditure rose further.
Third, consumption methods became more diverse while channels streamlined, unleashing greater vitality in consumption. From January to November, online shopping continued to dominate, with online retail sales of physical goods reaching 11.8 trillion yuan, a rise of 6.8 percent, accounting for 26.7 percent of total retail sales of consumer goods. E-commerce platforms have continuously innovated their service models, providing consumers with more convenient shopping experiences and enhancing the matching of supply and demand in the consumption sector. For instance, in the agricultural products segment, a Douyin E-commerce report indicated that from September 2023 to September 2024, the platform facilitated sales of 7.1 billion orders of specialty agricultural products, helping to expand the reach of high-quality offerings from rural to urban areas.
Fourth, recovery in domestic demand led to positive changes in consumer price indexes. By December 2024, China's core consumer price index had risen by 0.4 percent year-on-year for the third consecutive month and increased 0.2 percent month-on-month, surpassing the average of the previous five years. Price indices for household services, tourism, and dining out also experienced varying increases. These improvements in core indicators not only reflect a recovery in domestic demand but also indicate substantial potential for further stimulating consumption.
During the fourth quarter meeting of the Political Bureau of the CPC Central Committee, it was emphasized that "efforts should be made to vigorously boost consumption, improve investment efficiency, and expand domestic demand on all fronts." In 2025, China will prioritize boosting consumption and expanding demand. Policies such as goods trade-in programs and consumption subsidies will be extended to provide stronger support across a wider range of areas. Backed by robust policies, China's consumer market will continue to evolve toward greater diversification, personalization, and intelligence, further solidifying its role as the "ballast stone" for economic growth.
Sophie Wagner for TROIB News
In 2024, global economic growth experienced a slowdown due to escalating regional conflicts, trade tensions, and increasing debt issues in several countries. The International Monetary Fund's latest forecast in October projected a global economic growth of 3.2 percent for 2024, lower than the 3.3 percent registered in 2023 and below the pre-pandemic average.
Amid these challenging global economic and trade conditions, China's economic strengths became even more apparent in 2024, showcasing its solid foundation, numerous advantages, resilience, and substantial potential. The country not only effectively addressed various challenges but also witnessed economic recovery and improvements despite some fluctuations. China is on track to reach a growth target of around 5 percent for the year. The domestic consumer market is on the mend, with a clear trend toward consumption upgrading, making domestic demand a crucial driver for economic growth. Particularly after the government implemented a series of incremental policies in September 2024, market confidence was revitalized, leading to increased resilience and vitality in the consumption sector.
First, consumption scales reached historic highs. Recent data from the National Bureau of Statistics indicates that consumption continued to grow in 2024. From January to November, total retail sales of consumer goods reached 44.3 trillion yuan, reflecting a 3.5 percent year-on-year increase. Policies like goods trade-in programs and consumption vouchers, alongside year-end shopping and promotional events, helped sectors such as home appliances, audiovisual equipment, furniture, and automobiles show remarkable performance in the fourth quarter. Specifically, retail sales in these categories surged in November by 22.2 percent, 10.5 percent, and 6.6 percent year-on-year, respectively.
Second, the service consumption sector exhibited rapid growth, highlighting people's desires for better living standards and higher-quality consumption options. From January to November, retail sales in the service sector increased by 6.4 percent year-on-year, surpassing goods retail growth by 3.2 percentage points. Additionally, the proportion of per capita consumption expenditure on services within total consumption expenditure rose further.
Third, consumption methods became more diverse while channels streamlined, unleashing greater vitality in consumption. From January to November, online shopping continued to dominate, with online retail sales of physical goods reaching 11.8 trillion yuan, a rise of 6.8 percent, accounting for 26.7 percent of total retail sales of consumer goods. E-commerce platforms have continuously innovated their service models, providing consumers with more convenient shopping experiences and enhancing the matching of supply and demand in the consumption sector. For instance, in the agricultural products segment, a Douyin E-commerce report indicated that from September 2023 to September 2024, the platform facilitated sales of 7.1 billion orders of specialty agricultural products, helping to expand the reach of high-quality offerings from rural to urban areas.
Fourth, recovery in domestic demand led to positive changes in consumer price indexes. By December 2024, China's core consumer price index had risen by 0.4 percent year-on-year for the third consecutive month and increased 0.2 percent month-on-month, surpassing the average of the previous five years. Price indices for household services, tourism, and dining out also experienced varying increases. These improvements in core indicators not only reflect a recovery in domestic demand but also indicate substantial potential for further stimulating consumption.
During the fourth quarter meeting of the Political Bureau of the CPC Central Committee, it was emphasized that "efforts should be made to vigorously boost consumption, improve investment efficiency, and expand domestic demand on all fronts." In 2025, China will prioritize boosting consumption and expanding demand. Policies such as goods trade-in programs and consumption subsidies will be extended to provide stronger support across a wider range of areas. Backed by robust policies, China's consumer market will continue to evolve toward greater diversification, personalization, and intelligence, further solidifying its role as the "ballast stone" for economic growth.
Sophie Wagner for TROIB News
