China sets 2024 GDP growth target at 5pc

China revealed its growth target for 2024 overnight on Tuesday, aiming for a GDP rise of “around 5%”, as per the Government Work Report released during the annual National People’s Congress.

Premier Li Qiang presented the report, which outlined initiatives including the issue of “ultra-long” special bonds for significant projects, as well as the removal of restrictions on foreign investment in manufacturing.

The deficit-to-GDP ratio for the year was set at 3%, lower than the revised figure of 3.8% from last year.

To finance major projects aligned with national strategies, China said it planned to issue CNY 1trn (£110m) in “ultra-long” special treasury bonds and CNY 3.9trn of special-purpose bonds for local governments.

According to CNBC, the bonds were aimed at enhancing the effectiveness of proactive fiscal policy.

The ultra-long-term special treasury bonds would not be included in the deficit, with the move expected to support long-term strategic planning, particularly in infrastructure and key areas.

China’s National People’s Congress also focussed targets for urban unemployment, job creation, and consumer inflation.

Beijing was aiming for an urban unemployment rate of around 5.5%, the creation of 12 million new urban jobs, and a consumer price index rise of about 3%, consistent with the goals it set for 2023.

“Premier Li said risk prevention is the key aim of property market policy this year, and the work report left out the mantra ‘housing is for living, not speculation’ again,” said Pantheon Macroeconomics chief China economist Duncan Wrigley.

“But this is merely acknowledgement of the recent policy shift towards stabilising developer financing, with the rollout of nearly 300 urban real estate financing mechanisms.

“Mr Li called for promoting the stable and healthy development of the real estate market, but without hinting at further specific policy support for new housing demand.”

Wrigley added that Li called for encouraging the trade-in of old consumer goods for new ones, as well as the promotion of autos and electronics consumption, echoing the policy signals at top party meetings last week, but without providing details.

“China is likely to rely mainly on fiscal support to keep growth at an acceptable level, while monetary policy plays an accommodative role, with only token rate cuts.

“We think China is likely to see the need for another mid-year fiscal boost later this year, as the recovery will probably lose steam without further fiscal support.

“China is sticking to its guns by avoiding a mega-stimulus, as it refashions its growth model.”

Reporting by Josh White for Sharecast.com.