China’s Economic Targets 2024
China's Two Sessions, held from 4 to 11 March 2024, serves as a foundational platform for outlining the nation’s economic and political agenda. The 2024 congregations marked the meeting of the 14th National People’s Congress (NPC) and the 14th Committee of the Chinese People’s Political Consultative Conference (CPPCC), drawing attention globally for its economic targets and policy directions and the implications for international investors and businesses.
During Premier Li Qiang’s presentation of the Government Work Report (GWR), the annual Gross Domestic Product (GDP) growth target was announced at around 5 per cent. This decision reflects the focus on stable economic growth in the face of global uncertainties and aligns with the regional growth forecasts announced in January 2024.
Despite expectations for a more expansive fiscal policy, the fiscal deficit-to-GDP ratio target was kept constant at 3 per cent, suggesting a cautious approach to fiscal expansion. Nevertheless, the local government special bond issuance target increased slightly to RMB 3.9 trillion (USD 542 billion), an increase of RMB 100 billion (USD 13.9 billion) from the previous RMB 3.8 trillion, aimed at funding infrastructure and long-term projects. Additionally, the government plans to issue RMB 1 trillion (USD 138.9 billion) in ultra-long special central government bonds to support significant national strategies and enhance security in critical areas, a move that could boost economic activity.
China set its inflation target at a steady 3 per cent, consistent with previous years, reflecting an aim to maintain price stability amid efforts to boost domestic demand. Central to these efforts is the push for increased consumption in emerging sectors such as digital, green, and health-oriented industries, potentially driving demand in various service sectors. Additionally, the government has committed to creating 12 million new urban jobs, targeting an urban unemployment rate of 5.5 per cent. These measures are part of a broader strategy to stimulate economic activity and consumer spending, while carefully managing inflation and employment levels to ensure sustainable growth.
In 2023, China registered an 8 per cent decline in Foreign Direct Investment (FDI), prompting the government to escalate their efforts to boost confidence and attract FDI. Various measures were implemented in 2023 to enhance the business landscape for international firms, including initiatives to simplify cross-border data transfers and ease the regulations for business visas upon arrival. The 2024 GWR continues this direction, detailing measures to further reduce the negative list for foreign investment, such as the removal of investment restrictions in manufacturing and the easing of market access in services sectors such as telecommunications and healthcare.
With the emphasis of the 2024 Two Sessions on high-quality growth, China continued to prioritize the development of new drivers of economic expansion. A key aspect of this strategy involves a substantial increase in government funding for science and technology research, with a 10 per cent rise from 2023 to RMB 370.8 billion (USD 51.6 billion) for 2024. This investment is the largest annual increase since 2019. The focus extends to critical and emerging technology sectors, including artificial intelligence (AI) and life sciences, reflecting a strategic emphasis on enhancing the nation's industrial and innovative capacities.