China on track to achieve 5pc GDP growth target in 2024

Chinese President Xi Jinping. [AP]

China is on track to reach its 2024 GDP growth target of around 5 per cent, driven by strong policy stimulus, a continued recovery trend and a gradual increase in domestic demand, according to experts and entrepreneurs.

A report in the China Daily indicates that despite challenges from a sluggish real estate market, still-weak demand and mounting external uncertainties, China is set to achieve accelerated growth.

The report highlights that China still enjoys favourable conditions and capabilities to ensure steady growth and address structural issues.

Experts expressed optimism about the country’s long-term growth, emphasising that technological innovation, particularly in emerging fields like artificial intelligence and green industries, will serve as a new growth driver, supporting the world’s second-largest economy.

This optimism is reinforced by the latest stance of China’s top leadership, as concluded during the four-day third plenary session of the 20th Central Committee of the Communist Party of China on July 18.

A statement released after the meeting emphasised the country's commitment to promoting high-quality development, creating a fairer and more dynamic market environment, improving institutions and mechanisms to foster new quality productive forces, and further expanding opening-up.

Svein R. Tyldum, chief executive officer of the consultancy Marsh McLennan North Asia, said China’s economy has made a good start this year with positive factors, laying a foundation for achieving its annual growth target of around 5 per cent this year.

“China is a significant source of innovation and talent and a future competitive global competitor,” he said on the sidelines of the 15th

Annual Meeting of the New Champions, also known as the Summer Davos Forum, which concluded in late June in Dalian, Liaoning province.

“China’s pursuit of high-quality drivers of production and its economic development created greater cooperation space for companies around the world to work together more harmoniously.”

He expressed optimism about China’s economic prospects and the company’s operations in China this year and beyond, saying China is Marsh McLennan’s second-largest operation in Asia. The company is committed to the China market, with more investment plans in the pipeline.

Data from the National Bureau of Statistics showed that China’s economy grew by 5 per cent year-on-year in the first half of this year, which is consistent with the government’s around 5 per cent annual growth target set at the beginning of the year.

But in the second quarter, China’s GDP grew by 4.7 per cent year-on-year, cooling from 5.3 per cent growth in the first quarter.

China’s economy is still facing pressures from lacklustre demand, mainly due to a market correction in real estate, still-weak retail spending and the modest growth in infrastructure investment, said Sun Xuegong, director-general of the Department of Policy Study and Consultation at the Chinese Academy of Macroeconomic Research, which is part of the National Development and Reform Commission.

Against such a backdrop, the policy focus should be placed on boosting domestic demand, spurring consumer sentiment and expanding effective demand, including moves to further stabilise the housing market and strengthen the social security system, Sun said.

More efforts should also be made to stabilise employment, increase personal incomes, further unleash the services consumption potential and increase investment in areas related to the new quality productive forces, green development and people’s livelihood, he said.

China has already announced a series of measures to boost demand, including the issuance of 1 trillion yuan ($138 billion) worth of ultra-long-term special treasury bonds this year as well as driving large-scale equipment renewal and trade-in deals for consumer goods.

On the property front, the third plenary session statement vowed to well implement measures to resolve real estate risks.

Policymakers have pivoted towards more aggressive rescue measures, including more direct corporate balance sheet support and a step-up in nationwide demand-side easing, to bail out the sector.

Despite facing many headwinds, China still enjoys favourable conditions to foster steady economic growth this year, as the country’s domestic demand will likely pick up further in the remainder of the year with a series of supportive policy measures taking effect gradually, Sun said. “China will likely achieve its annual growth target this year.”

Foreign institutions have recently raised their forecasts for China’s economic growth this year amid the country’s continued economic recovery trend, strong policy stimulus and resilience in exports.

Barclays revised its China GDP forecast from 4.4 per cent to 5 per cent, and the World Bank changed its forecast from 4.5 per cent to 4.8 per cent.