China retains 5% growth target for 2024 as economy struggles to shake off slowdown

Beijing: Grappling with an economic slowdown and dwindling business sentiment, China has fixed a modest official growth target of around five per cent this year with a pledge to create 12 million jobs amid growing concerns over rising unemployment.

The country expects to create over 12 million jobs in urban areas and keep the surveyed urban unemployment rate at around 5.5 per cent this year, Chinese Premier Li Qiang said in his work report presented to the opening session of the country’s rubber-stamp parliament, the National People’s Congress (NPC).

The week-long NPC annual session at the Great Hall of People was attended among others by Chinese President Xi Jinping besides over two thousand delegates from across the country to deliberate and legislate on key initiatives needed to strengthen the growth of the second-largest economy, which continued with post COVID-19 slowdown.

A proactive fiscal policy and a prudent monetary policy will be continued, with the ratio of deficit to gross domestic product (GDP) set at three per cent and the government deficit to rise by 180 billion yuan (USD 26 billion) from the 2023 budget figure, Li said in his 39-page work report.

Last year China posted 5.2 per cent GDP, exceeding the official target of around five per cent amid mounting market concerns, waning investor confidence, a protracted property market slump, and a weak private sector progress.

Significantly, last year the government stopped publishing data on unemployment for the first time amid reports of a deepening job crisis.

However, in January the National Bureau of Statistics (NBS) said the jobless rate for the 16 to 24 age group stood at 14.9 per cent in December.

Playing down the concerns over the slowdown of the world’s second-largest economy, Li in his work report said, “We secured a smooth transition in epidemic response following a major, decisive victory in the fight against Covid-19”.

He said the main goals and tasks for economic and social development in 2023 were accomplished, and the government made steady progress in pursuing high-quality development, maintained overall social stability, and made solid advances in building a modern socialist country in all respects.

“Overall economic recovery and growth were boosted. China’s gross domestic product (GDP) surpassed 126 trillion yuan (about USD 18 trillion) an increase of 5.2 per cent, ranking China among the fastest-growing major economies in the world," he said.

A total of 12.44 million urban jobs were added, and the average surveyed urban unemployment rate stood at 5.2 per cent, he said.

“Looking back at 2023, we can see that as we faced an array of interwoven difficulties and challenges, China’s economy grew in a wave-like fashion amid twists and turns. Indeed, our achievements did not come easily," Li said.

China also has to grapple with sluggish global economic recovery.

"Geopolitical conflicts became more acute, protectionism and unilateralism were on the rise, and the external environment exerted a more adverse impact on China’s development," he said.

Domestically, owing to the impact of a three-year Covid-19 pandemic, many difficulties facing the country’s economic recovery and development had yet to be resolved, he said.

While deep-seated, long-standing issues became more pronounced, many new developments and problems emerged. A drop in external demand coincided with a lack of domestic demand, and both cyclical and structural issues arose, he said.

“Risks and potential dangers in real estate, local government debt, and small and medium financial institutions were acute in some areas," he said referring to the prevailing crisis in the property sector after some of the top real estate firms like Evergrande which has expanded aggressively to become one of China's biggest companies by borrowing more than USD 300 billion collapsed under the weight of its loans.

“However, thanks to the concerted efforts of the entire nation, we accomplished the year’s development goals and embraced positive changes on many fronts. In particular, we acquired a deeper understanding of the laws governing economic work in the new era and gained valuable experience in overcoming major difficulties," Li said and attributed the success to the leadership of Xi.

“All this demonstrates that under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the Chinese people have the courage, vision, and strength to meet any challenge and overcome any obstacle. There is no doubt that in pursuing development, China will continue to surge ahead, cleave mighty waves, and advance toward a great future”, he said.

Thousands of the NPC delegates and the members of the advisory body the Chinese People's Consultative Conference (CPPCC) converged in Beijing for their weekly annual sessions to conduct legislative agenda.

Li succeeded popular Premier Li Keqiang who died months after his retirement last year.