Beijing sets 2024 growth target higher despite slowing economy

The economy of the capital city expanded 5.2% in 2023, in line with the national economy, which has so far posted feeble post-pandemic growth amid a deepening property crisis, mounting local government debt and persistent deflationary risks.

“The target of around 5% is needed to stabilize expectations and boost confidence, to achieve important livelihood goals such as employment and household income,” the Beijing Daily reported on Sunday, citing an unnamed government official.

“But a growth rate of around 5% is still very challenging, and achieving the goal requires arduous efforts,” the official said.

Beijing aims to control its survey-based urban jobless rate below 5% this year.

China’s 2023 economic growth, which was slightly ahead of the annual target of around 5%, was partly helped by the previous year’s low-base effect amid Covid lockdowns.

Chinese leaders have made boosting confidence in the economy a top policy priority, as businesses and consumers are wary of job security, income growth and the housing market.

Beijing’s growth target for 2024 “may serve as a precursor” to a more supportive national growth target, said Tommy Xie, head of Greater China Research at OCBC Bank.

The national growth target is expected to be unveiled at the opening of the annual parliamentary meeting in March.

“This upward revision in the growth target for the current year, even with a higher base, reflects Beijing’s more pro-growth stance,” Xie said in a note.

Policy insiders expect Beijing will maintain a similar growth target of around 5% for this year, but analysts say that may be a tall order even with additional stimulus.

Analysts polled by Reuters expected economic growth to slow to 4.6% this year.

The southwestern municipality of Chongqing and Sichuan province both set their 2024 growth targets at around 6%, while eastern Shandong province aims to grow more than 5% this year.

Northern Hebei province sets this year’s growth target at around 5.5%.