Chinese Premier Li Qiang on Tuesday unveiled the country’s economic development program for 2024, promising steps to “transform” the national growth model and eliminate risks brought about by a recent slew of bankruptcies in the property sector.
In his speech to the annual meeting of the National People’s Congress in Beijing, Li said the country’s gross domestic product (GDP) target for this year would be set at “around 5%.” Li noted that the government would also work on lowering urban unemployment to 5.5% and plans to create 12 million new urban jobs and set the consumer inflation target at 3%.
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The 2024 targets are similar to those set for last year, but some economists view this year’s goals as rather bold, given the country is still struggling with deflation, debt, and a crippling real estate crisis.
“Compared with last year, a growth target of around 5% is still relatively ambitious, especially considering China’s tepid post-Covid recovery, property sector challenges, recurrent deflation, and dampened business and consumer confidence,” Neil Thomas and Jing Qian from the Centre for China Analysis told South China Morning Post.
Li acknowledged the economic headwinds the country is facing, saying that the post-pandemic recovery has indeed been “difficult” and that “external factors have negatively affected our country’s development.” However, he also emphasized that major national industries have made progress despite challenges. For instance, Chinese car manufacturing now accounts for 60% of the global market, he said.
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In order to reach this year’s targets, Li said that the government will need to take a “proactive” fiscal stance and enact “prudent” monetary policy, including through boosting employment and incomes and defusing risks caused by existing debts.
“We must push ahead with transforming the growth model, making structural adjustments, improving quality, and enhancing performance,” he stated. Li did not give the exact timeline or outline details for the changes, but noted that economic stability will be “the basis for everything we do.”
Among the steps China intends to take this year, Li mentioned financing “justified” projects in the property sector, curbing industrial overcapacity, opening up more sectors for foreign investment and “completely scrapping” restrictions for foreign investment in manufacturing, and giving wider access to private investors.
China’s GDP grew by 5.2% in 2023, its slowest pace of expansion since 1990, with the exception of the three pandemic years through 2022. Many Western analysts expect China’s growth to slow further due to high debt and the housing crisis that has undermined consumer confidence. The IMF earlier predicted that the country’s GDP would come in at 4.6% in 2024 amid the lingering weakness in the property sector and subdued external demand.