China’s 2024 GDP result was a “Pyrrhic victory” that should not distract Beijing from efforts to rebalance its economy towards more sustainable growth, said Eswar Prasad, professor at Cornell University and senior fellow at the Brookings Institution.
The result also underlines doubts about China’s official data, which analysts increasingly worry is not reflecting underlying weakness in the economy.
“The Chinese government’s ostensible attainment of its growth target is a Pyrrhic victory that further erodes credibility in official data and, at best, reflects an economy still beset by underlying fragilities and loss of confidence in government policymaking,” he said.
Prasad added that the data would “do little to change the picture of an economy facing a dangerous combination of entrenched deflationary pressures, weak domestic demand, diminished private sector confidence, a falling currency and a hostile external environment”.
He called for Beijing to launch “a substantial, targeted stimulus package that encompasses monetary and fiscal measures coupled with a path to reforms that bolsters private sector confidence”.
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