Mar 6 2024: In a joint briefing during Beijing’s annual parliamentary meeting, China’s state planner asserted that the government’s 5% economic growth target for 2024, considered ambitious by many analysts, is indeed attainable. Zheng Shanjie, chairman of the National Development and Reform Commission (NDRC), expressed confidence in the target’s alignment with the 14th Five-Year Plan’s objectives and the country’s economic potential.
Premier Li Qiang unveiled the growth goal of approximately 5% in his inaugural work report to the National People’s Congress, emphasizing the need to revamp the development model to counter challenges such as a prolonged property crisis, escalating local government debts, and sluggish consumer demand.
However, analysts caution that achieving this year’s target may necessitate additional stimulus measures. Mark Williams, Chief Asia Economist at Capital Economics, highlighted concerns about the structural decline in China’s property sector and its impact on economic growth.
Amid doubts about the sustainability of China’s investment-heavy economic model post-COVID-19, policymakers are under pressure to take decisive action. Although manufacturing activity contracted for the fifth consecutive month in February, there are indications of modest improvement in the services sector.
China’s exports surged by 10% in the January-February period, according to Zheng, although specific details regarding currency denomination were not provided. Economists anticipate slower year-on-year growth in outbound shipments compared to previous months.
Pan Gongsheng, Governor of the People’s Bank of China (PBOC), affirmed the bank’s commitment to maintaining the stability of the yuan and indicated potential further reductions in banks’ reserve ratio requirements (RRR). These statements have fueled expectations for additional monetary easing measures.
China’s stock market and economy have faced significant challenges, prompting the approval of a plan aimed at promoting equipment upgrades and consumer goods sales. This initiative, spearheaded by the country’s securities watchdog and supported by the finance minister, aims to address investor concerns and bolster confidence in the market.
Despite concerns about escalating local government debt, Finance Minister Lan Foan assured that risks are under control, with measures in place to manage them effectively.
Overall, China remains focused on achieving its growth targets through strategic economic policies and reforms, despite the formidable challenges ahead.
