China will set a growth target of 5 percent this year. China has also undertaken several reform programs to achieve this growth. Mainly, the country’s government will work to transform the development model, prevent industrial overcapacity, reduce the risk of the property sector and reduce the waste of local government.
Chinese Premier Li Qiang said this on Tuesday. The Chinese premier made these remarks while presenting his first work report at the annual meeting of China’s legislature, the National People’s Congress (NPC), at the Great Hall of the People in Tiananmen Square.
China’s growth was like this last year too. However, to achieve growth at this rate this year, government incentives must be increased. As China’s economy is still dependent on state investment, the country’s growth largely depends on how much the government provides incentives. That is why the country’s local government debt has become a mountain.
China’s post-Covid economic recovery program has not gained much momentum. Analysts say this has exposed deep structural imbalances in the country’s economy. On the one hand, the country’s household consumption expenditure is decreasing, on the other hand, the amount of dividends received from investments is also decreasing. So now there is a demand to formulate a new development model.
China’s economy is going exactly opposite to where the world economy is going. Inflation is increasing in all major economies, but in China, prices are falling. Demand is decreasing in the country. China’s economy as a whole is plagued by housing and debt crises.
In this situation, China has undertaken several reform programs. China will invest more resources in technology innovation and manufacturing. Prime Minister Lee said these will be done in line with President Xi Jinping’s policy of creating new sectors of production.
Apart from this, restrictions on sectors such as telecom and healthcare will be lifted, along with the lifting of foreign investment limits in the manufacturing sector. In addition, plans will be made to develop emerging industries, according to Reuters news.
The Chinese government plans to reduce the budget deficit to 3 percent this year; Last year it was 3.8 percent. The important thing is that they want to release 1 trillion yuan or 13,900 billion dollars in bond market in the long term. However, it is not included in the budget.
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The local government’s special bond issuance quota is set at 390 billion yuan; In 2023 which was 3 lakh 80 thousand billion dollars. At the same time, China wants to achieve a consumer inflation rate of 3 percent and employment of 12 million people this year. Through this they want to keep the unemployment rate within 5.5 percent.
Peking University economics professor Xia Qingjie told Reuters that the Chinese government does not want to provide much stimulus to the economy; At the same time, he wants to pull the loan rush.
Analysts expect the Chinese government to reduce annual growth targets in the future. International Monetary Fund or IMF forecasts, China’s growth this year will be 4.6 percent; In 2028, which may come down to 3.5 percent.
China’s economic growth did not slow last year according to official statistics; The country’s growth in 2023 is shown to be 5.2 percent. In the previous year i.e. 2022 also there was a growth of more than 5 percent. But analysts think it is not enough for China.
