The Outer

Can China achieve its GDP growth goals in 2024?

By Manal Abdel Fattah

China is aiming for GDP growth of about 5 percent for 2024, the latest sign that the world’s second-largest economy is clinging to high-quality development despite uncertainties at home and abroad.

The specific target, which is unchanged from the previous year’s growth target, is one of the main development goals revealed in the government work report submitted by Chinese Premier Li Qiang to the national legislature, which began its annual session last Tuesday.

In 2024, China aims to create more than 12 million jobs in urban areas, and keep the urban survey-based unemployment rate at about 5.5 percent, the report said. The country also plans to spend 1.66554 trillion yuan (about 234.5 billion US dollars) on defense, an increase of 7.2 percent, and has set an inflation target of about 3 percent.

Reasonable goal

The GDP growth target of about 5 percent for the current year was set after the Chinese economy showed resilience and resilience in 2023, recording a growth of 5.2 percent year-on-year.

“In setting the growth rate at about 5 percent, we took into account the need to boost employment, raise incomes and prevent and defuse risks,” Li said.

This growth rate is consistent with the goals of the 14th Five-Year Plan and the goal of essentially achieving modernization. It also takes into account growth potential and conditions supporting growth, and reflects the requirement to pursue progress and make unremitting efforts to achieve it, according to Li.

Han Peojiang, a professor at the Party School of the Communist Party of China Central Committee (National Academy of Governance) and national political adviser, said the GDP growth target is “realistic and encouraging” and shows that the government is constantly highlighting the quality of growth.

Tian Xuan, vice dean of the PBC School of Finance at Tsinghua University and a national legislator, said the specified growth rate is in line with the availability of policy instruments and the sustainability of economic development, leaving ample room to enhance the transformation of growth drivers and deal with external uncertainties.

Ample policy tools

The report also pointed out the multiple difficulties and challenges facing the country, such as the lack of a solid enough foundation for recovery, sustainable economic growth, and the lack of effective demand.

“Achieving this year’s goals will not be easy, so we need to maintain policy focus, work harder and muster coordinated efforts from all parties,” Li said.

The report said that a proactive fiscal policy and prudent monetary policy will be continuously pursued in 2024. A set of measures to boost growth for the current year were also unveiled, including 3.9 trillion yuan of special-purpose bonds for local governments and the issuance of ultra-long-term special treasury bonds.

At the same time, the country will address the symptoms and root causes of defusing risks in the real estate sector, local government debt and small and medium-sized financial institutions to maintain overall economic and financial stability, the government work report said.

“China has an abundant and flexible set of policy tools to maintain stable economic growth and counter external headwinds,” said Zhuang Yumin, dean of the School of Finance at Renmin University of China and a national legislator, citing the country’s introduction of structural monetary and financial instruments to provide targeted support to specific areas as an example.

The government work report stressed the need to enhance the coherence of overall policy direction.

Growth engines are in place

In order to support high-quality development in the country, the report identified key pro-growth steps to drive the economy.

The report said that China will launch a one-year program to stimulate consumption, and will launch policies to promote digital, environmentally friendly and health-related consumption.

The report also revealed that China will increase active investment. This year, 700 billion yuan will be allocated in the central government budget for investment.

The report sets out a series of tasks to modernize the industrial system and develop new productive forces at a faster pace, including improving and modernizing industrial and supply chains, and developing emerging and future-oriented industries such as hydrogen energy, new materials, biomanufacturing, commercial spaceflight, quantum technology and life sciences.

China also plans to implement measures to ensure national treatment for foreign-funded enterprises, pledging to make more efforts to attract foreign investment.

Jiang Ying, president of Deloitte China and national political advisor, said that China has a huge market and the country remains open in seeking to continuously improve the business environment, stressing, “The Chinese economy offers abundant opportunities and creates development space for all kinds of market players.”

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