China is looking to maintain its five per cent economic growth in 2023, setting the same target of around 5 per cent for the 2024 year.

The 2024 growth target was announced by Chinese Premier Li Qiang on Mar. 5, 2024 at the opening of China's parliament, the annual National People's Congress (NPC) during the Two Sessions.

Steps to achieving 5 per cent growth target in 2024

Li, who was delivering his maiden work report at the Great Hall of the People in Beijing, also laid out the steps in his promise to transform the country's growth model.

This includes running a target fiscal budget deficit of 3 per cent, creating 12 million new jobs, and boosting incomes, among others, CNN reported.

Li said China will also be developing its "new quality productive forces" — technological capabilities in the electric vehicle, biomanufacturing, commercial spaceflight, quantum technology and other industries — to drive growth, Nikkei Asia reported.

The country will also ease or abolish certain barriers to foreign investment.

Too ambitious?

While China's economy grew 5.2 per cent in 2023, this would be a tough act to follow in 2024, especially as its post-Covid-19 recovery is slowly losing steam, some analysts said.

Amid a slowing economy, prolonged property sector crisis, weaker global demand, and rising geopolitical tensions, the World Bank projected in January 2024 that the Chinese economy would grow 4.5 per cent in 2024.

The International Monetary Fund similarly projected in February 2024 that China will grow by 4.6 per cent this year.

Even Li admitted this, saying that achieving 2024's growth targets "will not be easy" and there are "many difficulties facing our economic recovery and development [that] have yet to be resolved" due to the Covid-19 pandemic, Reuters reported.

Noting that "the foundation for China's sustained economic recovery and growth is not solid enough", Li said, "we must push ahead with transforming the growth model, making structural adjustments, improving quality, and enhancing performance."

What this means

The five per cent growth target for 2024, while seemingly ambitious, sends the public a signal that China is prioritising growth over other reforms, and hopefully boosts their confidence in China’s economy, analysts said.

Li said: "Making progress is our goal, and it is also what motivates us."

Other budgets

Li also announced that China will be boosting its defence spending by 7.2 per cent to S$317 billion (1.67 trillion yuan) in 2024, which was the same rate as 2023.

It will also boost its annual budget for science and technology by 10 per cent to S$70 billion (370.8 billion yuan), which is the biggest increase since 2019, The Straits Times reported.

"We will move faster to boost self-reliance and strength in science and technology," Li said.

"We will fully leverage the strengths of the new system for mobilizing resources nationwide to raise China’s capacity for innovation across the board."

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Top image by Winnie Li