中国经济更新，2024年12月：需求复苏，势头恢复（英）

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - China's GDP growth has moderated to 4.8% in the first three quarters of 2024, primarily due to subdued domestic demand and a contracting property sector, which saw real estate investment decline by 11.5% year-on-year from July to November [25][62] - Incremental policy stimulus has been introduced to support growth, including a RMB 300 billion consumer trade-in scheme and a RMB 10 trillion program to swap local government off-budget debt for lower-cost on-budget financing [26][111] - The property sector remains a significant drag on economic activity, with new home sales in the primary market declining by 51.5% in value compared to peak levels in July 2021 [92] - Despite challenges, manufacturing investment grew by 9.6% year-on-year, supported by robust external demand and policy incentives [63] Summary by Sections I. Recent Economic Developments - Growth momentum has slowed under domestic demand constraints, with GDP growth decelerating from 5.3% in Q1 to 4.6% in Q3 2024 [62] - The property sector's adjustment continues to impact investment negatively, while net exports have provided some support to growth [62] - Retail sales growth has weakened, reflecting low consumer confidence, with retail sales growing only 2.8% year-on-year in July-November [63] - Manufacturing and infrastructure investments have remained robust, partially offsetting the contraction in real estate investment [63] II. Outlook, Risks, and Policy Implications - GDP growth is projected at 4.9% in 2024 and 4.5% in 2025, with policy support expected to provide a modest boost to housing demand [28][133] - Weak domestic demand is anticipated to keep consumer price inflation low at 0.4% in 2024, rising to 1.1% in 2025 [29][133] - The outlook is subject to risks, including a potential persistent downturn in the property sector and global trade uncertainties [30] III. Special Focus: Economic Mobility and China's Emerging Middle Class - The secure middle class in China has expanded significantly, from 9.8% to 32.1% of the population between 2010 and 2021 [34] - Despite progress, 17% of the population remains low-income, and 38.2% are in the vulnerable middle class, indicating ongoing economic vulnerabilities [35] - Education plays a crucial role in upward mobility, with higher education correlating with better economic outcomes [178]