A view of the skyline of Beijing's CBD area. Photo: VCG

Editor's Note: At the beginning of 2024, the world is closely watching the signals that China, the world's second-largest economy, will release regarding its economic development this year. With China exceeding expectations with GDP growth of 5.2 percent in the first three quarters of 2023, international institutions have raised their outlook for China's annual economic growth. Meanwhile, there is significant attention being given to questions such as the economic growth targets China will set for 2024, how China's macroeconomic policies will be deployed, and the key priority areas. The Global Times (GT) invited two Chinese economists to provide observations on China's economic situation and policy direction for this year.

It is widely estimated that Chinese economy may have expanded by about 5.2 percent in 2023. Its GDP grew by 5.2 percent year-on-year in the first three quarters last year. In the fourth quarter, particularly in November and December, several leading indicators are gaining momentum. These figures back up the upward revision of international institutions' estimates of China's economic growth in 2023.

China bolstered its policy support in the fourth quarter of 2023. In October, China announced an additional issuance of 1 trillion yuan ($137 billion) in special government bonds. 

However, it is important to note that there may be a time lag between the implementation of these fiscal supportive policies and their effects becoming evident. The impact of these policies will gradually emerge.

In my opinion, the economic growth target for 2024 should be set at around 5 percent, and China should continue to strive to meet this target. It is crucial to have a comprehensive understanding of the goals for economic growth, with a focus on achieving both qualitative improvements and moderate growth rate. 

An annualized GDP growth of 5 percent is reasonable as it can generate more jobs. If the economic growth rate remains at about 5 percent, there will be positive effects on corporate profits, fiscal revenue gains and the incomes of urban and rural residents. These sectors will continue to experience healthy growth.

It is important to note that a 5-percent growth rate in 2024 will be different from the 5-percent growth rate in 2023, due to the lower base of 2022. Setting the economic growth target for 2024 should take into account the relative higher base in 2023. Therefore, I believe that a 5-percent growth target for 2024 reflects both qualitative improvement and reasonable growth in quantity.

China's economy is facing the challenge of insufficient market demand, due to the slowdown in the growth of household income in recent years. The fundamental solution is to increase the proportion of household income in the initial distribution and redistribution of national income. 

In the short term, it is necessary to expand employment to increase household income.

In 2024, special attention should be given to youth employment, and solving the youth employment problem should be a top priority. Fiscal policy should strengthen support for enterprises to stabilize employment and help support enterprises to hire more employees through subsidies and other measures.

In terms of macro policies, the 3-percent budget deficit red-line could be appropriately relaxed in order to fiscally support the formation of a virtuous cycle of social and economic development.

China's economy is continuously accumulating elements for high-quality development, especially in terms of exports where products like the "new three items" are gaining momentum. In order to further unleash the potential of the Chinese economy, it is necessary to address bottlenecks in the circulation in the domestic market. 

The central government has made it clear that the greatest advantage of Chinese economy lies in its having an enormous consumption market. This year, China should focus on removing barriers in the market and reactivating consumer demand while stabilize foreign trade.

In addition to the complex global situation, China's economy faces some deep-seated challenges too. However, in general, China's favorable conditions outweigh unfavorable ones. The economy will maintain a relatively stable growth momentum this year.

To achieve high-quality development, China should focus on the contradiction between unbalanced and inadequate development and people's ever-growing need for a better life. Meeting that need should be an important starting point for the policymakers.

To achieve its economic growth target, China needs to strengthen its fiscal and monetary policy support, and create synergy among various policies to promote stable and progressive economic development. The stability and progress of the economy have three major aspects: stabilizing expectations, stabilizing growth and stabilizing employment. 

This year, China also needs to focus on adjusting the structure of the economy, transforming the growth model, improving quality and increasing efficiency. If China successfully addresses these issues, the economy will achieve both qualitative and quantitative growth, and meet the set goals.

The article was compiled based on an interview with Yao Jingyuan, a special researcher of the Counselors' Office of the State Council. bizopinion@globaltimes.com.cn