China aiming for GDP growth of 5% in 2024

China is looking to expand the economy by around 5% this year, with the government introducing targeted macro policies to sustain stable growth, according to a new Government Work Report.

The country pledged to marry flexible fiscal policies with prudent monetary policy in a flexible, moderate, targeted and effective manner, according to the report delivered by Premier Li Qiang.

Speaking at the opening of the second session of the 14th National People’s Congress in Beijing, Li said China has set its projected deficit-to-GDP ratio to 3% for 2024 and targeted a whole-year inflation rate of around 3%.

The report also said the government aims to create more than 12 million urban jobs this year, and keeps the urban unemployment rate at around 5.5 percent.

On top of that, the country will fully implement the guidelines and supporting measures on driving the development of the private sector, intensify efforts to attract and utilize more foreign investment, and increase the volume and raise the quality of foreign trade, according to the report.

The report said that efforts should be made to advance the construction of a modern industrial system and accelerate the development of new quality productive forces, with special emphases on upgrading industrial and supply chains, fostering emerging industries and future-oriented industries, and growing the digital economy, said the report.

Xu Guanju, a deputy to the National People’s Congress and chairman of chemicals manufacturer Transfar Group, said the report pointed out the direction of relying on technological innovations to drive development and relying on quality instead of quantity to improve manufacturing, Xu said. “It will inspire us to prioritize quality improvement and technological breakthroughs to boost our competitiveness on the global stage,” he said.

Lei Jun, a deputy to the National People’s Congress and chairman of Xiaomi Corp, said China’s emphasis on cultivating new quality productive forces will motivate companies to embrace higher-end, greener and smarter manufacturing.

China’s services activity growth momentum slows in February

China’s services activity grew at a slower pace in February, with business confidence moderating for the second month and firms trimming staff numbers for the first time since November, a new survey has found.

The Caixin/S&P Global services purchasing managers’ index (PMI) edged down to 52.5 from 52.7 in January, but was still above the 50-mark that separates expansion from contraction for the 14th consecutive month.

The outcome is in contrast to an official government survey that showed services activity expanded at a faster pace, providing a mixed picture of conditions in a vital sector of the economy. Authorities are counting on services to pick up the slack of the manufacturing sector as it struggles to motor on amid slow global demand.

Despite robust activity during the eight-day Lunar New Year holidays, the expansion rate of new business was changed little from January, the Caixin survey showed.

Foreign demand was the most pronounced since June last year amid reports of firmer customer orders across external markets.

However, outstanding business fell for the first time since July 2022 and payroll numbers across the services sector dropped in February after expanding marginally in the prior two months.

That explains why business confidence slipped to a four-month low in February, with some companies being more cautious around forecasts due to relatively subdued market conditions and expectations that client spending may remain muted.

Reuters reported: “The world’s second-biggest economy has struggled to mount a solid post-Covid rebound amid a property crisis and as consumers hold off spending, manufacturers struggle for buyers and local governments contend with huge debt burdens.

“To boost demand, Chinese policymakers have rolled out several measures over the past year, including delivering the biggest cut to banks’ reserve ratio in two years in January. On Friday the cabinet approved a plan aimed at promoting large-scale equipment upgrades and sales of consumer goods.”