Prospects for China’s economy in 2024

Chinese Premier Li Qiang delivered a government work report on behalf of the State Council at the opening meeting of the second session of the 14th National People's Congress.

Chinese Premier Li Qiang delivered a government work report on behalf of the State Council at the opening meeting of the second session of the 14th National People’s Congress, held at the Great Hall of the People on Tuesday. According to the report, China is targeting economic growth of around 5 percent in 2024.

While this may appear modest compared to the growth rates of the 1990s and 2000s, the sheer size of the increment is significant given the current economic base. But still, it’s an achievable target. Though faced with external and internal challenges, 2024 will continue to bring much hope to China’s economy.

The government work report emphasizes the importance of ensuring stability in areas such as consumption, employment, and local debt.

To boost consumption and transition towards a more consumption-driven economy, the government has committed to supporting key economic sectors by maintaining necessary levels of fiscal spending. The Ministry of Commerce has also announced measures to promote further opening up and reform, designating 2024 as the “year of promoting consumption” and emphasizing the need to revive demand and attract more investment.

Employment is also a top priority. Adhering to an employment-first strategy, China has taken important steps to stabilize and strengthen job opportunities. A total of 12.44 million jobs were created in urban areas in 2023, with about 33.97 million people who were lifted out of poverty securing new employment opportunities over the past year. Going forward, the country will prioritize employment even more prominently and implement measures to enhance the effectiveness of policies aimed at strengthening employment.

With an aging population and high debt levels, local government debt continues to pose economic stability concerns. Over the next few years, the government aims to appropriately refinance existing debt and promote stability by leveraging policy tools such as the additional issuance of treasury bonds, local government bonds and local government special bonds.

Furthermore, China is undergoing an economic transformation and must seek new sources of growth. Technological innovation and the rise of new industries will play a crucial role in driving future economic expansion. China has witnessed rapid advancements in sectors like electric vehicles, battery tech, and solar energy. To sustain economic growth, China must further expand and enhance its technological innovations.

The shift from a traditional to digital economy is crucial for China’s new era of development, with potential global implications. Accelerating advancements in artificial intelligence, robotics, automation, blockchain, and advanced manufacturing will contribute to incremental economic growth.

These measures, in conjunction with the establishment of a “unified national market” initiative, hold the potential to provide additional room for China’s economic growth when implemented effectively.

The emergence of new quality productive forces will inject fresh momentum into China’s economic recovery, enhance the nation’s resilience against external risks, and bolster its core competitiveness on the global stage.

China has assumed this role for a considerable period of time, and despite many challenges it faces, one can reasonably expect China to continue playing this pivotal role in 2024.

From our partner CGTN

Edward Tse
Edward Tse
Edward Tse is the founder and CEO of Gao Feng Advisory Company, a strategy consulting and financial advisory firm with roots in China.