China’s economic performance in 2024 serves as a testament to the resilience, adaptability, and determination of the world’s second-largest economy. Despite facing global challenges such as geopolitical tensions, weak demand, and domestic hurdles, China achieved a GDP growth rate of 5 percent.
As the global economy, according to the World Economic Forum (WEF), braces for another year of uncertainty, China’s economic prospects offer valuable lessons for other countries, especially those grappling with sanctions and challenges of economic dominance.
Manufacturing remains the backbone of China’s competitiveness. In 2024, China’s manufacturing sector held its top position globally for the 15th consecutive year, a feat acknowledged by China’s Ministry of Industry and Information Technology. Despite market volatility, domestic consumption continues to drive growth, with consumers fueling manufacturing, which in turn creates jobs and wages—an economic cycle that other nations, like Kenya, could emulate to boost their own economies.
For instance, December’s industrial production surged by 6.2 percent, spurred by a resurgence in manufacturing and infrastructure projects. Retail sales climbed 3.5 percent year-on-year, signaling improved consumer confidence and household spending. These figures highlight the Chinese government’s balanced approach to policy-making, which addresses both short-term needs and long-term structural goals.
The manufacturing sector, a pillar of China’s economic stability, grew by 5.8 percent in 2024, demonstrating the resilience of supply chains and the adaptability of Chinese businesses to shifting global dynamics. These results underscore China’s position as a global trade and growth engine.
To spur further growth, the Chinese government took proactive fiscal measures, including lowering interest rates and the reserve requirement. These steps are designed to support businesses and stimulate economic activity. Additionally, China’s policy of deregulating key industries and encouraging private-sector participation has spurred investments, particularly in high-tech and green energy sectors.
Kenya, while benefitting from an improved credit outlook from global agencies like Moody’s, must also create a conducive environment for business growth. One critical area is tax policy consistency, as constant changes can hinder investor confidence and economic stability.
China’s structural reforms focus on long-term sustainability rather than quick fixes, and Kenya should adopt a similar mindset to avoid the pitfalls of short-term strategies that may undermine economic progress. The challenge for Kenya, however, lies in translating policy intentions into tangible improvements for its citizens. Despite President William Ruto’s campaign promises, many Kenyans remain frustrated by unmet expectations and ongoing economic challenges.
As of December 2024, Kenya’s inflation rate stood at 3.0%, but many citizens have yet to feel the benefits of this improvement. A more comprehensive economic stimulus is needed to address these frustrations. This is where Kenya can learn from China’s economic strategy, particularly in terms of creating a favorable environment for investors, increasing manufacturing output, and reactivating businesses that were affected by the pandemic.
China’s recent economic stimulus measures—such as reducing interest rates, increasing liquidity, and boosting fiscal spending—are examples of strategies that Kenya might consider adopting to revitalize its economy. These measures, along with increased credit supply, have been crucial in stimulating domestic consumption and improving business confidence.
Kenya’s recovery will not rest solely on government actions. A collaborative effort between the Ministry of Treasury, key economic stakeholders, and the public is essential. Transparency and openness in government decision-making are crucial for fostering trust and ensuring that economic strategies benefit the wider population. President Ruto’s initiative to lower commercial lending rates is a step in the right direction, and if coupled with other measures to stimulate economic activity, it could pave the way for sustainable job creation and economic recovery.
In conclusion, China’s 2024 economic performance offers valuable lessons for Kenya as it navigates its own economic challenges. By fostering a favorable business climate, increasing manufacturing capacity, and embracing structural reforms, Kenya has the potential to overcome its current economic obstacles and create a more prosperous future for its citizens.
By Onyango K’Onyango
