China’s economic growth has always attracted global attention, and the latest data from Reuters shows that China’s economic growth in the fourth quarter of 2024 reached +5.4% YoY. This is even better compared to the third quarter growth of only +4.6% YoY. This growth not only beat consensus expectations of +5% YoY, but it was also the highest figure in the last six quarters!

With these results, economic growth throughout 2024 will reach +5% YoY, in line with the Chinese government’s target and exceeding the World Bank’s projection which previously estimated +4.9% YoY. From a quarterly perspective, growth in 4Q24 showed a +1.6% QoQ increase, reflecting a positive trend in the Chinese economy.

Economic Stimulus and Growth That Drives

China’s economic growth in the fourth quarter of 2024 was driven by a series of stimulus measures from the government and central banks since September 2024. These measures aim to accelerate the post-pandemic economic recovery, and they seem to be paying off. However, for the future, the World Bank projects that China’s economic growth will slow to +4.5% YoY in 2025. This decline is expected to be due to reduced consumer and business confidence, as well as challenges in the property sector.

Although it is projected to slow down, the projection remains +0.4 percentage points higher than the World Bank’s previous expectations. This shows that the market remains optimistic about the breadth of China’s economy despite the challenges that exist.

Coal Import Growth and Development Targets

Moving on to an equally important topic, China’s coal imports reached the highest figure in history in 2024, with a total of 542.7 million tons. This represents an increase of +14.4% YoY and is equivalent to 41% of total global coal imports. This situation is very beneficial for Indonesia, which is one of the main suppliers of coal to China.

Data from BPS shows that Indonesia’s coal export volume to China will reach around 93.2 million tons in 2024, although in terms of value, it has decreased to around 6.6 billion US dollars due to price fluctuations.

Future Prospects

For 2025, the China Coal Transport and Distribution Association estimates that coal imports will decline by -3.26% year-on-year to 525 million tons, as domestic production increases. However, demand is expected to continue to grow, albeit at a slower pace. The increase in coal demand is very important to offset coal production which is predicted to increase.

We believe that China’s coal demand outlook is determined by the extent to which the stimulus disbursed by the Chinese government is effective. This strength of demand is critical to driving growth in the broader sector of the economy.

Conclusion

Overall, China’s economic growth has a significant impact on the coal market, both as a major consumer and in the context of influence on other countries such as Indonesia. With growth exceeding expectations and stimulus measures continuing, there is hope for continued growth in the future. However, challenges remain, and it is important for investors to monitor these dynamics regularly.