‘Two sessions’: China sets 5 percent growth target for 2024 amid headwinds

Beijing sets one of its lowest targets in decades amid property crisis, slowing exports and population decline.

China has set its economic growth target for 2024 at 5 percent, far below the double-digit growth that for decades powered the world’s second-largest economy.

China’s rubber-stamp National People’s Congress (NPC) officially unveiled the target on Tuesday as its $18 trillion economy is facing serious headwinds.

“We should communicate policies to the public in a well-targeted way to create a stable, transparent and predictable policy environment,” Chinese Premier Li Qiang said as he delivered his maiden work report outlining policy goals for the year.

Li said Beijing would push ahead with “transforming the growth model”, including through tax reform, fostering talent in tech, boosting domestic consumption, removing barriers to private investment, and issuing 1 trillion yuan ($139 bn) in special government bonds.

“We should not lose sight of worst-case scenarios and should be well prepared for all risks and challenges,” Li said.

The 5 percent target, which matches last year’s goal, comes as the Chinese economy is grappling with multiple challenges, including a property crisis, slowing exports, geopolitical tensions with the United States, population decline, huge debt and record youth unemployment

China’s economy officially grew 5.2 percent in 2023, its weakest performance in decades excluding the COVID-19 pandemic downturn.

“The ‘around 5 percent’ growth target shows China has moved away from chasing a fixed number with other policy priorities, such as the tech competition with the US and security [gaining importance],” Gary Ng, an economist at Natixis in Hong Kong, told Al Jazeera.

“It is hard to expect any bazooka type of stimulus as the government only seeks stability in the economy, meaning the growth rate will likely slowly decelerate down the road.”

In his speech, Li acknowledged “multiple challenges” facing the economy, including difficult external circumstances and “accumulated and deep-rooted problems.”

The annual gathering is being closely watched by investors for announcements to shore up confidence in the economy.

International investors have been pulling out of China at record rates, with $68.7bn worth of corporate and household capital flowing out of the country last year.

Analysts have tempered expectations of sweeping measures to boost the economy due to Beijing’s aversion to broad-based social spending.

Li’s speech on Tuesday comes after officials announced that the premier would not hold a news conference at the end of the legislature’s annual session for the first time since 1993.

The move has been seen as a further example of Chinese President Xi Jinping’s efforts to concentrate control in the hands of the ruling Communist Party.