DIGIVESTASI - China has announced that the country's economy has achieved its 5 percent growth target for 2024, although this figure is lower than the 5.4 percent recorded in the previous year. The announcement was made on Friday, January 17, 2025.

According to a report from AP News, the manufacturing sector contributed the most to the economic growth, with industrial production rising by 5.8 percent compared to last year. China's positive performance was also driven by a 7.1 percent annual increase in exports and a 2.3 percent rise in imports.

Eswar Prasad, a Professor of Economics at Cornell University, expressed doubt about this achievement, as most economic activity indicators and financial markets show signs of recovery. "The economy is still hindered by weak domestic demand, deflationary pressure, and external challenges that may affect exports," he said.

Prasad also pointed out that China’s export challenges are expected to worsen after the inauguration of Donald Trump next week. Trump plans to raise tariffs on goods from China. Additionally, the Biden administration has imposed restrictions on semiconductor and advanced technology exports to maintain the United States' technological edge and limit China's access.

A spokesperson for China's National Bureau of Statistics, Fu Linghui, explained that the country has taken various steps to address these challenges, including focusing on boosting consumption and expanding domestic demand. "With coordinated policies and additional regulations, it is hoped that the momentum for economic recovery will strengthen, consumer demand will grow more quickly, and there will be more favorable factors for a more moderate price recovery," Fu said.

Moreover, China has expanded its trade schemes for consumer goods and raised the Regional Minimum Wage (UMR) for workers in an effort to boost domestic purchasing power. While these measures are important, some economists argue that these gradual actions must be accompanied by broader structural reforms, such as improving productivity and reducing dependence on the construction sector and export manufacturing.

Another issue facing China is the limitations of social insurance, which leads many families to prefer saving rather than spending. Additionally, the situation has become more complicated after efforts to lower housing prices led to a decline in the stock prices of real estate companies and many people experiencing a drop in their social class.

Prasad emphasized that China needs a comprehensive policy package to revive economic growth. "A good policy package should include significant monetary and fiscal stimulus as well as other measures to restore private sector confidence," he said.

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