The Chinese government has set its lowest targets in decades amid a real estate crisis, slowing exports and a shrinking population.
China has set an economic growth target of 5% for 2024, far below the double-digit growth that has supported the world's second-largest economy for decades.
China's stalwart National People's Congress formally announced its goals on Tuesday, as China's $18 trillion economy faces serious headwinds.
China's Premier Li Qiang delivered his first working report outlining policy goals for this year, saying he would “deliver policy to the people in a targeted manner to create a stable, transparent and predictable policy environment.” It needs to be communicated.”
Li said the Chinese government is seeking to “transform its growth model” through tax reform, developing technology talent, boosting domestic consumption, removing barriers to private investment, and issuing 1 trillion yuan ($139 billion) in special bonds. He said he would promote it.
“We must not lose sight of the worst-case scenario and must be fully prepared for all risks and challenges,” Lee said.
The 5% target is in line with last year's target, as China's economy faces multiple challenges including a real estate crisis, slowing exports, geopolitical tensions with the United States, a declining population, high debt and record youth unemployment. This was realized in the face of
China's economy officially grew by 5.2% in 2023, its weakest performance in decades, excluding the slump caused by the coronavirus pandemic.
In his speech, Lee acknowledged the “multiple challenges” facing the economy, including a difficult external environment and “accumulated deep-seated problems.”
Investors will be watching closely to see if any announcements will be made at the annual meeting to boost confidence in the economy.
Foreign investors are leaving China at record speed, with $68.7 billion worth of business and household capital leaving the country last year.
Analysts have tempered expectations for drastic measures to stimulate the economy because of the Chinese government's aversion to widespread social spending.
Lee's speech on Tuesday came after officials announced that for the first time since 1993, the prime minister would not hold a press conference at the end of parliament's annual session.
The move is seen as a further example of Chinese President Xi Jinping's efforts to centralize power in the hands of the ruling Communist Party.