Beijing sets ambitious 5% growth target for 2024 amid economic challenges

Beijing economy: Despite facing challenges in the national economy, China's capital city, Beijing, has unveiled an ambitious growth target of around 5 per cent for the year 2024. This target surpasses the previous year's goal of above 4.5 per cent, showcasing a commitment to economic expansion even amid expectations of slower growth on a national scale.

In 2023, Beijing's economy grew by 5.2 per cent, aligning with the national economic growth rate. The country has been grappling with sluggish post-pandemic growth, exacerbated by a deepening property crisis, escalating local government debt, and persistent deflationary risks.

"The target of around 5 per cent is needed to stabilise expectations and boost confidence, aiming to achieve vital livelihood goals such as employment and household income," reported the Beijing Daily on Sunday, citing an unnamed government official. The official acknowledged that achieving this target would be challenging, requiring significant efforts.

One of Beijing's key goals for the year is to keep its survey-based urban jobless rate below 5 per cent. The 2023 economic growth slightly exceeded the annual target of around 5 per cent, influenced in part by the low-base effect from the previous year's COVID-19 lockdowns.

Chinese leaders have prioritised boosting confidence in the economy, given concerns among businesses and consumers regarding job security, income growth, and the housing market.

Tommy Xie, Head of Greater China Research at OCBC Bank, suggested that Beijing's growth target for 2024 may be a precursor to a more supportive national growth target. The national target is anticipated to be revealed 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," noted Xie in a statement.

While policy insiders anticipate that Beijing will maintain a similar growth target of around 5 per cent for this year, analysts suggest that achieving this goal, even with additional stimulus, may be challenging. Analysts polled by Reuters project economic growth to slow to 4.6 per cent in 2024.

Other regions in China have also set growth targets for 2024, with the southwestern municipality of Chongqing and Sichuan province aiming for around 6 per cent, eastern Shandong province targeting growth of over 5 per cent, and northern Hebei province setting a growth target of around 5.5 per cent for the year.

(With Reuters inputs.)