China’s 5% Growth Target For 2024 Is Achievable: Official

The head of China's state planner said on Wednesday that the government's 5 per cent economic growth target this year, which many analysts say is ambitious, is achievable and that he expects the world's second-largest economy to have a good first quarter.

Speaking at a rare joint briefing on the sidelines of the annual parliament meeting in Beijing with China's finance minister, commerce minister, central bank chief, and head of the securities regulator, Zheng Shanjie said officials would step up economic policy adjustments this year to consolidate recovery.

"The target is in line with the annual requirements of the 14th Five-Year Plan and matches the potential economic growth, and it is a positive goal that can be achieved with a leap of faith," said Zheng, chairman of the National Development and Reform Commission (NDRC).

Premier Li Qiang on Tuesday announced the growth goal of around 5 per cent in his maiden work report to the National People's Congress and promised to transform the country's development model to offset the drag from a prolonged property crisis, high local government debts and weak consumer demand.

But analysts say much more stimulus may be needed to hit this year's target and Li's vision contains an inherent contradiction: his aim to "transform" the economic model may be incompatible with keeping growth rates steady.

"The drag from the unavoidable structural decline in China's property sector has only just begun," Mark Williams, chief Asia Economist at Capital Economics, said in a note to clients, while warning that weak demand in the construction sector "would shave another percentage point off China's average economic growth rate over the rest of this decade."

China's disappointing post-Covid recovery has cast doubts about the foundations of its investment-heavy economic model, raising the stakes for government action at the week-long parliament meeting of senior policymakers.

China's manufacturing activity in February shrank for a fifth straight month, an official survey showed on Friday, though the services sector showed modest signs of improvement.

"Comprehensive analysis shows that the economy can be expected to have a good first quarter," Zheng said, referring to February manufacturing and services sector data.

He also said that China's exports for the January-February period increased by 10 per cent, but did not state whether that was in yuan or US dollar terms.

Economists recently polled by Reuters expected outbound shipments in the first two months to grow just 1.9 per cent year-on-year, slowing from December. The trade data will be released on Thursday.

China's foreign trade faces a severe situation this year, commerce minister Wang Wentao told the briefing.