Asian Markets Dip Despite China's 5% Economic Growth in 2024

In 2024, China's economy expanded by 5%, aligning with government targets but marking a slowdown from the previous year's growth. This growth was primarily driven by a 6% surge in manufacturing, bolstered by strong exports and policies aimed at increasing consumer spending and investment. Despite these positive indicators, Asian stock markets reacted modestly. Both the Hang Seng and Shanghai Composite indices experienced slight declines of 0.1%. Japan's Nikkei index fell by 1%, and South Korea's Kospi decreased by 0.3%. Conversely, India's Sensex index saw a 0.4% increase.

In the technology sector, Taiwan Semiconductor Manufacturing Corp. (TSMC) reported a 57% profit increase, attributed to the rising demand for artificial intelligence applications. Despite this strong performance, Taiwan's Taiex index dipped by 0.1%.

In the United States, stock indices experienced declines following mixed earnings reports. The S&P 500 and Dow Jones Industrial Average each fell by 0.2%, while the Nasdaq Composite dropped by 0.9%. Tesla's decision to offer discounts on its Cybertruck raised concerns about potential sales declines. Additionally, UnitedHealth Group's shares decreased despite reporting higher-than-expected profits, due to lower revenue figures and the impact of an executive's shooting incident.

Economic reports from the U.S. indicated a slight slowdown, though not suggestive of an imminent recession. This trend may help alleviate inflationary pressures. Globally, the World Bank reported steady economic growth at 2.7% for 2025 and 2026, consistent with the previous two years but below the pre-2019 average. This pace is considered insufficient to significantly reduce global poverty, particularly in developing economies facing challenges such as high debt and climate change costs.

In summary, while China's achievement of its 5% growth target reflects economic resilience, the muted response in Asian markets suggests investor concerns about future growth prospects and underlying economic challenges.