Analyzing China’s Major Economic Activities to Predict Growth Drivers in 2024


Analyzing China’s Major Economic Activities to Predict Growth Drivers in 2024

In 2023, consumption played a major role in driving growth, but early data suggests that relying solely on consumption to achieve this year’s growth target may be challenging. Retail sales experienced a slowdown, with a year-to-date growth rate of 5.5% YoY, slightly below market expectations but slightly above our own.

Different sub-categories within retail sales showed varying levels of performance. The “eat, drink and play” theme showed strong growth, with catering, tobacco, and alcohol sales increasing by 12.5% YoY and 13.7% YoY respectively. Sports and recreation goods also performed well, rising by 11.3% YoY.

Communications devices and auto sales also had a solid start to the year, with year-to-date growth rates of 16.2% YoY and 8.7% YoY respectively. This growth can be attributed to replacement cycles benefiting communications devices and ongoing subsidies for new energy vehicles (NEVs) benefiting auto sales.

Online retail sales continued to outperform overall retail sales, with a year-to-date growth rate of 14.4% YoY. This trend is expected to continue as various forms of e-commerce gain popularity.

Retail sales of housing appliances and furniture had a weaker start to the year, with year-to-date growth rates of 5.7% YoY and 4.6% YoY respectively. This may be due to a weak property sector limiting demand, but policies expected to encourage trade-ins of old products for new are anticipated to boost these categories later in the year.

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