BEIJING – China is confident of achieving its 2023 economic growth target as the economy picks up, the vice head of the state economic planner said on Monday, after China set a modest growth target of around 5 percent for this year.
Domestic stock indexes opened subdued on Monday after the world’s second-biggest economy did not set itself a more ambitious growth target this year as it kicked off the annual session of its National People’s Congress.
Thanks to changes in COVID-19 prevention and control policies, the recovery in mobility for people and goods is speeding up, Zhao Chenxin, deputy head of the National Development and Reform Commission (NDRC), told a news conference on Monday.
“China’s economy is steadily improving,” Zhao said, adding they are “full of confidence” in achieving the 2023 economic growth target.
“The around 5 percent target is in line with current economic momentum… and it will help guide all parties to focus on improving the quality and efficiency of economic development.”
The government will also tackle risks related to property, finance and local government debt in an appropriate manner, Zhao said.
China’s economy staged one of its weakest performances in decades last year, when gross domestic product (GDP) grew by just 3 percent, squeezed by stringent COVID controls, a crisis in the property sector and a crackdown on private enterprise.
China’s gross domestic product (GDP) grew by just 3 percent last year, one of its worst showings in decades, squeezed by three years of COVID-19 restrictions, crisis in its vast property sector, a crackdown on private enterprise and weakening demand for Chinese exports.
In his work report, outgoing Premier Li Keqiang stressed the need for economic stability and expanding consumption, setting a goal to create around 12 million urban jobs this year, up from last year’s target of at least 11 million, and warned that risks remain in the real estate sector.
Li set a budget deficit target at 3.0 percent of GDP, widening from a goal of around 2.8 percent last year.
“We should give priority to the recovery and expansion of consumption,” said Li, who spoke for just under an hour in a speech to open the parliament, which will run through March 13.
“The incomes of urban and rural residents should be boosted through multiple channels.
We should stabilize spending on big-ticket items and promote recovery in consumption of consumer services,” he said.
This year’s growth target of around 5 percent was at the low end of expectations, as policy sources had recently told Reuters a range as high as 6 percent could be set. It is also below last year’s target of around 5.5 percent.
“While the official growth target has been lowered for the second consecutive year, which might be a disappointment to the market, we reckon investors (should) pay attention to the underlying growth momentum to gauge the recovery pace,” said Zhou Hao, economist at Guotai Junan International.
Li and a slate of more reform-oriented economic policy officials are set to retire during the congress, making way for loyalists to President Xi Jinping, who further tightened his grip on power when he secured a precedent-breaking third leadership term at October’s Communist Party Congress.
During the NPC, former Shanghai party chief Li Qiang, a longtime Xi ally, is expected to be confirmed as premier, tasked with reinvigorating the world’s second-largest economy.
The rubber-stamp parliament will also discuss Xi’s plans for an “intensive” and “wide-ranging” reorganization of state and Communist Party entities, state media reported on Tuesday, with analysts expecting a further deepening of Communist Party penetration of state bodies. — Reuters
