By Juliana Liu, Hassan Tayir and Nectar Gan, CNN

Hong Kong (CNN) — China’s economy grew more than expected in the last three months of 2024, official data showed on Friday, as it awaits the likely imposition of fresh tariffs by US President-elect Donald Trump, who takes office next week.

Much of the growth momentum came from exports, which propelled the country’s trade surplus to a record high of just under $1 trillion last year. That strength, though, is likely to draw the ire of Trump, who has said China will face higher tariffs on its goods, by 10% above any existing tariffs, until it prevents the flow of illegal drugs into the United States. On the campaign trial, he had threatened upwards of 60% on all Chinese imports to the US.

The National Bureau of Statistics (NBS) separately revealed that China, which is struggling with demographic and economic problems, also notched a surprise increase in the birth rate last year, reversing a trend of declines that intensified from 2017. But the overall population continued to decline for a third year.

In the fourth quarter, the country’s gross domestic product (GDP) expanded by 5.4%. That’s considerably stronger than the 5.0% forecast by a group of economists polled by Reuters and represents an acceleration from the 4.6% pace posted in the third quarter.

As for the full year, growth came in at 5.0%, a shade higher than the 4.9% predicted by the Reuters poll. Goldman Sachs analysts said the quarterly growth data and last month’s industrial production numbers beat expectations “meaningfully,” but weaknesses remain.

They anticipate that growth will slow to 4.5% this year “as the growth drag from likely higher US tariffs may more than offset the ongoing policy easing amid the prolonged property downturn and still-weak consumer sentiment,” they wrote in a research note.

Economic momentum did pick up in the last few months of 2024, after the Chinese leadership finally decided to go ahead with a much-needed stimulus package, mostly focused on monetary measures, in the last week of September.

Since then, policymakers have made a series of other moves — including a 10 trillion yuan ($1.4 trillion) debt package to help local governments, interest rate cuts and the expansion of a “cash-for-clunkers” scheme for household goods such as rice cookers — to boost growth.

Many experts believe much more needs to be done to light a fire under the country’s vast population of consumers, who have been sitting on the sidelines after suffering a massive loss of wealth from the continuing housing slump, which amounted to an estimated $18 trillion, according to investment bank Barclays.

In fact, some believe the imminent return of Trump and his possible sky-high tariffs may be just what is needed to jolt the Chinese leadership into taking more action.

Beijing has shown that “they will do whatever it takes to offset the impact of tariffs,” Larry Hu, chief China economist at Macquarie Group, said in a Wednesday research note. “Strong tariffs result in strong stimulus and thus better domestic demand.”

Birth rate increases

China is contending with a slew of pressures, including a severe property crisis, which has eroded consumer wealth and hurt household spending, and a demographic challenge, expected to have significant implications on future growth.

Last year, the country recorded 6.77 births per 1,000 people, up from 6.39 a year earlier, according to the NBS. Some 9.54 million babies were born, an increase of more than half a million from 2023.

This is the first time China has recorded an increase in newborns since 2016, when the country saw a brief uptick in births following the relaxation of its decades-long one child policy.

The small rebound comes after the government has rolled out a raft of measures to nudge young people to have more children, from extending maternity leaves and offering financial incentives to improving childcare services. 2024 was also the Year of the Dragon on the Chinese lunar calendar, an especially auspicious year for having babies.

But the overall population has fell by 1.39 million to 1.408 billion in 2024, continuing a decline since 2022 that saw China replaced by India as the world’s most populous nation.

China’s working population, classified as those between the ages of 16 and 59, also declined by 6.83 million last year, adding to an ongoing contraction. The population of those over 60, meanwhile, continued to expand to account for 22% of the total population.

The rapidly aging population and shrinking workforce pose a severe challenge to China’s economic and social stability, as it grapples with funding health care and pensions for elderly citizens while aiming to maintain growth.

In 2015, China announced an end to its decades-long one-child policy, allowing couples to have two children, then increased that to three children in 2021. But birth rates have continued to drop after a brief uptick.

The government has also vowed to promote a “new-era marriage and childbearing culture” by encouraging young people to get married and give birth at an “appropriate age” and share responsibility for childcare.

So far, these policies have largely failed to convince young adults, who are grappling with high unemployment, rising living costs and a lack of social welfare support amid the economic slowdown. Many are postponing marriage and childbirth, and a growing number of young people even choose to eschew them entirely.

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This story has been updated with additional information and context.