China on Tuesday set a growth target of around 5 percent for its economy in 2024, a "forward-looking and pragmatic" goal which deputies and economists said sends strong signals that the world's second-largest economy will sustain its firm recovery momentum this year despite rising headwinds, while putting more emphasis on ensuring economic stability and transforming growth models.

Although achieving the growth target will not be an easy task given the sheer size of the Chinese economy and a grim global environment, Chinese officials have voiced strong confidence that the economy will likely meet or even hit over the target, underpinned by the country's indigenous economic vigor as well as Chinese top policymakers' strategic focus and rich toolbox at hands.

The highly anticipated economic agenda also offers a timely rebuttal to Western doomsayers who have recently been sparing no efforts to disparage the Chinese economy. A 5-percent GDP expansion this year would make China still one of the fastest-growing major economies, raising global expectation that the country would continue serving as both a stabilizer and a locomotive for the world.

The photo taken on on April 21, 2023 shows Phase 4 automated terminal at Yangshan Port in Shanghai. Photo: VCG

Strong confidence

The around 5-percent GDP target, along with a series of other key economic goals, was released in the Government Work Report delivered by Premier Li Qiang on Tuesday to the second session of the 14th National People's Congress (NPC).

The GDP goal is similar to last year's and is in line with market expectation, which observers said mirrors the country's work priority to maintain policy consistence and economic stability.

In setting the growth rate, Chinese policymakers have taken into account the need to boost employment and income, and prevent and defuse risks. This growth rate is well aligned with the objectives of the 14th Five-Year Plan (2021-25) and the goal of basically realizing modernization. It also takes account of the potential for growth and the conditions supporting growth and reflects the requirement to pursue progress and strive to deliver, according to Government Work Report. 

While acknowledging that achieving this year's targets will not be easy, Li pledged that the country will "maintain policy focus, work harder, and mobilize the concerted efforts of all sides."

"The GDP goal is very forward-looking and inspiring. In the Government Work Report, Chinese policymakers do not refrain from walking through this year's challenges and downward pressures, and they showed strong confidence and capacity to tackling with them head on," Pan Biling, a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) and the president of Xiangtan University, told the Global Times on Tuesday. 

Tian Yun, a veteran economist based in Beijing, told the Global Times on Tuesday that the target also underscores Chinese authorities' "bottom-line" thinking strategy, based on a sober assessment of a worst-case scenario. 

People watch the opening meeting of the second session of the 14th National People's Congress on an outdoor large screen in Beijing on March 5, 2024. Photo: cnsphoto

"Without a certain modest level of GDP expansion, it would be very difficult to shore up the real economy, maintain the sound development of capital market, and lift up social expectation," he explained. "And an abrupt slowdown could fuel social uncertainties and financial risks."

Observers said a 5-percent GDP growth aligns with the long-term development goals laid out by the 14th Five-Year Plan (2021-25) and the Long-Range Objectives through 2035, which stated that the country's GDP should double by 2035, compared with its 2020 level. It also provides a necessary condition for China to achieve its goal of "creating over 12 million new urban jobs" in 2024 listed in the Government Work Report.

According to Tian, if the Chinese economy grows by 5 percent or above this year, it will still be one of the fastest among major economies. 

A growth rate of around 5 percent would also be faster than IMF's projected global growth rate of 3.1 percent or the forecast of 1.5 percent for advanced economies and 4.1 percent for emerging market and developing economies. The IMF, in its latest World Economic Outlook report released in January, projected that China's GDP will grow by 4.6 percent in 2024

"China's net contribution to the global economy is poised to be larger than previous decades, taking account of the high base," Tian said. Observers estimated that the Chinese economy will contribute around 30 percent to 35 percent to global growth this year.

Han Baojiang, a member of the National Committee of CPPCC and a professor at Party School of the Central Committee of the Communist Party of China, told the Global Times that setting GDP goal is also a "timely, clear" response to certain pessimistic voices on Chinese economy, especially from the international society.

"The positivity released by the economic work is clearly in contrast with Western smears against the Chinese economy. And those doomsayers don't understand the vigor and potential of an economy whose modernization involves 1.4 billion people," Han said. 

This aerial photo taken on Aug. 18, 2023 shows people taking bamboo rafts on the Gongshui River in Xuan'en County of Enshi Tujia and Miao Autonomous Prefecture, central China's Hubei Province. A series of activities have been held to boost the nighttime economy in the scenic area of Xuan'en County including sightseeing trips on the Gongshui River and night fairs along the river. (Xinhua/Cheng Min)

Transforming growth model

Deputies and political advisors told the Global Times that there is a slew of new policy insights from this year's Government Work Report. "I could see a spirit of reform and innovation in the economic roadmap," Pan said. 

According to the report, China will move faster to create a new pattern of development, and promote high-quality development. The report highlighted 10 major tasks this year and "striving to modernize the industrial system and developing new quality productive forces at a faster pace" was listed at the foremost.

"New quality productive forces are a pioneering concept proposed by Chinese top leaders last year. As the Chinese economy is undergoing a period of structure transition, the creation of such drives will play an outsized impact not only in guiding economic progress, but also in shaping the global tech landscape," Han said, while highlighting China's whole-nation systematic advantage in gearing up such new drives. 

Chen Fengying, an economist and former director of the Institute of World Economic Studies at the China Institutes of Contemporary International Relations, told the Global Times on Tuesday that drawing upon the wording from the Government Work Report, she expects to see Chinese government's "broader efforts" in innovation, reform and opening-up.

"The international environment remains complex amid a year fraught with presidential elections. Meanwhile, the US has been taking aim at China's tech industry with its so-called 'small yard, high fence' approach. Internally, the Chinese economy also faces an array of hindrances, including weak market confidence and property market downturn that could weigh on the development prospect," Chen said. She noted that it is crucial that China deepens reforms, especially in driving internal demands, to sustain a full-fledged economic recovery. 

The Government Work Report also presaged more fiscal stimulus to shore up the economy this year, according to economists. 

China's deficit-to-GDP ratio is set at 3 percent this year, and the government deficit is set at 4.06 trillion yuan, an increase of 180 billion yuan over the 2023 budget figure.

"We should appropriately enhance the intensity of our proactive fiscal policy and improve its quality and effectiveness," Li said. He also proposed that 1 trillion yuan ultra-long special treasury bonds will likely be issued in 2024, and such bonds will also be issued over each of the next several years.

"It is a good time to scale up the issuance of special treasury bonds, as the borrowing cost will inch lower in the coming months, and as China's inflation is relatively low," Tian said, adding that China still has sufficient room for more fiscal and monetary policy maneuver this year. 

Observers said if the potential of all available resources and other elements are fully utilized, China could realize a GDP growth rate of between 5 percent and 6 percent this year, landing well above the 5-percent goal.

China's overall economic recovery and growth were boosted in 2023, according to Li. Its GDP surpassed 126 trillion yuan last year, an increase of 5.2 percent, ranking China among the fastest-growing major economies in the world.