Country wants GDP to grow 5% this year; plans to create more than 12 million jobs and achieve 3% inflation target
China aims to achieve a GDP growth rate of 5% by 2024, the latest sign that the world's 2nd largest economy is committed to high-quality development despite internal and external uncertainties.
The projected target, which remains unchanged from last year's growth target, is one of the key development objectives released in the government's work report. The document was presented by Chinese Prime Minister, Li Qiang, to the national legislature, which opened its 2nd session on Tuesday (5.Mar.2024).
By 2024, China aims to create more than 12 million jobs in urban areas and keep the surveyed urban unemployment rate at around 5.5%, the report said. The country also plans to spend more than 1.66 trillion yuan ($234.5 billion) on defense, up 7.2 percent. It also establishes an inflation target of around 3%.
REASONABLE GOAL
The GDP growth target of around 5% for this year was set after the Chinese economy showed strength and resilience in 2023, recording annual growth of 5.2%.
“By setting the growth rate at around 5%, we consider the need to increase employment and income and prevent and neutralize risks”Li said.
This growth rate is well aligned with the goals of the 14th Five-Year Plan and the goal of realizing modernization. According to Li, it also takes into account growth potential and the conditions that support growth and reflects the requirement to pursue progress and strive to achieve results.
Han Baojiang, professor at the Party School of the Communist Party of China Central Committee (National Academy of Governance) and national policy advisor, said the GDP growth objective is “realistic and stimulating”. The target also shows that the government continues to emphasize the quality of growth.
Tian Xuan, vice dean of the PBC School of Finance at Tsinghua University in China and a national lawmaker, said the projected growth rate is in line with the availability of policy tools. It also agrees with the sustainability of economic development, leaving ample room to promote changing drivers of growth and deal with external uncertainties.
ABUNDANT POLICY INSTRUMENTS
The report also noted multiple difficulties and challenges that the country is facing, such as an insufficiently solid foundation for recovery, sustained economic growth and a lack of effective demand.
“Achieving this year’s goals will not be easy, so we need to maintain policy focus, work harder and mobilize joint efforts from all sides”said the Chinese premier.
A proactive fiscal policy and prudent monetary policy will be continued into 2024, according to the report. A series of measures to boost growth in 2024 were also unveiled, including 3.9 trillion yuan in special-purpose bonds for local governments and the issuance of special ultra-long Treasury bonds.
Meanwhile, the country will address symptoms and root causes to neutralize risks in the real estate sector, local government debt and small and medium-sized financial institutions to ensure overall economic and financial stability, it said.
“China has a fairly abundant and flexible set of policy tools to maintain stable economic growth and deal with external headwinds”said Zhuang Yumin, dean of the School of Finance at Renmin University of China and a national policymaker, citing as an example the introduction of structural monetary and fiscal tools to offer targeted support to specific fields.
The coherence of macropolitical guidance must be strengthened, the report said.
READY GROWTH ENGINES
To sustain the country's high-quality development, the report presented key pro-growth measures to boost the economy.
China will launch a 1-year program to stimulate consumption and policies to promote digital, green and health-related consumption, the report said.
The document also disclosed that China will increase effective investment. This year, 700 billion yuan will be allocated in the central government's budget for investment.
A series of tasks to modernize the industrial system and develop new quality productive forces at a faster pace are described in the report. Among them are the improvement and updating of industrial and supply chains.
It also includes the cultivation of emerging industries 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 companies, promising more efforts to attract investment from other countries.
Jiang Ying, president of Deloitte China and national policy advisor, said China has a huge market. He further stated that the country remains open-minded in its quest to continually improve its business environment. “The Chinese economy offers abundant opportunities, creating development space for all types of market participants”he said.
With agency information Xinhua.
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