Beijing Sets 2024 Growth Target Higher Despite Slowing Economy

China's capital city Beijing has set a growth target of around 5 per cent for 2024, surpassing last year's target of above 4.5 per cent, despite expectations of slower growth for the national economy.

The economy of the capital city expanded 5.2 per cent 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 per cent is needed to stabilise 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 per cent 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 per cent this year.

China's 2023 economic growth, which was slightly ahead of the annual target of around 5 per cent, was partly helped by the previous year's low-base effect amid Covid-19 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 per cent 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 per cent this year.

The southwestern municipality of Chongqing and Sichuan province both set their 2024 growth targets at around 6 per cent, while eastern Shandong province aims to grow more than 5 per cent this year. Northern Hebei province sets this year's growth target at around 5.5 per cent.