China's Fourth Quarter GDP Growth and Retail Sales Accelerated, New Home Prices Extended Decline to December

Li Chen
17 Jan, 2025
Hong Kong

Stock market indexes in China and Hong Kong retained a mild upswing after the release of key economic data. 

The Hang Seng index advanced 0.3%, and the mainland-focused CSI 300 index gained 0.6%, and investors welcomed the acceleration in economic growth in the fourth quarter. 

China's GDP expanded at an annual pace of 5.4% in the fourth quarter, faster than 4.6% in the third quarter, the National Bureau of Statistics reported Friday. 

The economic growth was the strongest in six quarters, boosted by a surge in exports and aggressive stimulus, but market sentiment was tempered by the lack of clarity in implementing additional stimulus measures. 

For the full year 2024, China's economy expanded at an annual pace of 5%, matching the estimate set by the central government but slower than 5.2% in 2023. 

China's annual GDP growth is expected to slow to closer to 4% in 2025 and decline further to 3% over the subsequent two years. 

In other economic news, industrial output soared 6.2% in December, surpassing the 5.4% in November, the statistical bureau reported in a separate report. 

For the full year 2024, industrial output increased to 5.8%, largely because of the strength in the manufacturing sector.

China's retail sales growth accelerated to 3.7% in December from 3.0% in November, but sales growth slowed to 3.5% in the whole of 2024 from 7.2% in 2023. 

Online sales and rising demand for basic items supported the advance in retail sales in the year. 

The unemployment rate advanced to 5.1% in December, ahead of the 5% target set by the government, despite the strength in the manufacturing sector. 

New home prices in 70 large cities declined 5.3% from a year ago in December, the National Bureau of Statistics reported Friday. 

New home prices have been on the slide outside of the four largest urban areas, despite several incentives announced by local governments over the last three months. 

New home prices decreased for the 18th month in a row despite the People's Bank of China lowering mortgage rates and facilitating purchases by first-time home buyers. 

Prices in Beijing fell 5.4% compared to 5.3%, Shenzhen declined 6.1% from 7.1%, and in Guangzhou dropped 9.1% and matched the rate in the previous month, respectively. 

However, new home prices in Shanghai increased 5.3% compared to 5.0% in November. 

 

China Stock Movers 

The Hang Seng index increased 0.3% to 19,581.15, and the CSI index advanced 0.6% to 3,824.41. 

Property stocks declined in Hong Kong and China after the release of new home price data. 

China Vanke decreased 6.2% to HK $4.56 after a local newspaper reported that the company's chief executive, Zhu Jiusheng, was taken away by local police. 

The property developer is struggling to repay its domestic and foreign currency-denominated debt of $4.9 billion on time.