The government of China has set its economic growth target for 2024 at 5 percent, far below the double-digit growth that for decades powered the world’s second-largest economy indicating a sharp drop in expectations.
Africa Today News, New York reports that China’s rubber-stamp National People’s Congress (NPC) officially unveiled the target on Tuesday as its $18 trillion economy is facing serious headwinds.
“We should communicate policies to the public in a well-targeted way to create a stable, transparent and predictable policy environment,” Chinese Premier Li Qiang said as he delivered his maiden work report outlining policy goals for the year.
Li said Beijing would push ahead with “transforming the growth model”, including through tax reform, grooming talent in tech, boosting domestic consumption, removing barriers to private investment, and issuing 1 trillion yuan ($139 bn) in special government bonds.
“We should not lose sight of worst-case scenarios and should be well prepared for all risks and challenges,” Li said.
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Li said the government would aim to create 12 million new urban jobs and target an unemployment rate of 5.5 per cent.
Li also said China’s military budget would increase by 7.2 per cent to 1.66 trillion yuan ($231.4bn).
Africa Today News, New York reports that China’s economic roadmap, which matches last year’s goal, comes as the Chinese economy is grappling with multiple challenges, including a property crisis, slowing exports, geopolitical tensions with the United States, population decline, huge debt and record youth unemployment
China’s economy officially grew 5.2 percent in 2023, its weakest performance in decades excluding the COVID-19 pandemic downturn.
“The ‘around 5 percent’ growth target shows China has moved away from chasing a fixed number with other policy priorities, such as the tech competition with the US and security [gaining importance],” Gary Ng, an economist at Natixis in Hong Kong, told Al Jazeera.
“It is hard to expect any bazooka type of stimulus as the government only seeks stability in the economy, meaning the growth rate will likely slowly decelerate down the road.”
In his speech, Li acknowledged “multiple challenges” facing the economy, including difficult external circumstances and “accumulated and deep-rooted problems.”
The annual gathering is being closely watched by investors for announcements to shore up confidence in the economy.
International investors have been pulling out of China at record rates, with $68.7bn worth of corporate and household capital flowing out of the country last year.