China sets 5% growth target for ’24

Chinese Premier Li Keqiang announced 2024 economic growth target of around five per cent, pledging to transform the country’s development model and address risks from bankrupt property developers and indebted cities, Reuters reported on Tuesday.

In his first work report at the annual meeting of the National People’s Congress, China’s parliament, Li also highlighted increased defense spending and took a firm stance on Taiwan.

Analysts noted that by setting a growth target similar to last year, Beijing is prioritising growth over reforms, despite Li’s promise of bold new policies, the statement added.

The challenge of achieving five per cent growth this year is greater due to the higher base number, indicating the leadership’s commitment to assisting economic growth, said chief macro analyst at Soochow Securities Tao Chuan.

China’s economy showed uneven growth last year, revealing deep structural imbalances and promoting calls for a new growth model, according to the statement.

The country also faced challenges such as a stock market crash, deflation, and on-going issues with property and local government debt.

Li emphasised the need to transform the growth model, make structural adjustments, improve quality, and enhance performance, but did not provide a timeline or concrete details for the intended structural changes.

Acknowledging the difficulty of reaching the target, Li emphasised the need for a proactive fiscal stance and prudent monetary policy to boost employment, incomes, and prevent and address risks.

The International Monetary Fund (IMF) projects China’s 2024 growth at 4.6 per cent, declining to 3.5 per cent in 2028.

Chinese stocks and the yuan were largely unchanged following Li’s announcement.

Some analysts expressed disappointment with the lack of a bigger push for reforms, noting that while there is rhetorical support for addressing local government debt and the property sector, the key lies in how these policies are applied in practice.