World experts voice confidence over China’s ability to achieve 5% GDP growth, welcome global impact

The closing meeting of the second session of the 14th National Committee of the Chinese People’s Political Consultative Conference is held at the Great Hall of the People in Beijing on March 10, 2024. (ZOU HONG / CHINA DAILY)

By Prime Sarmiento in Hong Kong, Wang Xiaodong and Edith Mutethya in Nairobi, Chen Weihua in Brussels, Xing Yi in London, Lia Zhu in San Francisco, Xu Yifan in Washington, Zhang Minlu in New York and Yang Wanli in Bangkok

China will remain a key driver of global economic growth, with analysts from around the world expressing confidence that the nation is on track to hit its 5 percent GDP target this year.

Chinese Premier Li Qiang announced this year’s GDP target when he delivered the Government Work Report at the opening meeting of the annual session of the country’s national legislature on March 5.

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Zheng Shanjie, director of the National Development and Reform Commission, said the goal is achievable via enhanced efforts. Zheng told a March 6 news briefing that China has the confidence, capabilities and conditions to meet the economic and social development targets.

Commerce Minister Wang Wentao said at the same briefing that China will encourage the trade-in of consumer goods, including automobiles, household appliances and home furnishings, to bolster consumption.

He added that from 2013 to 2023, the proportion of per capita consumption expenditure directed toward services increased by 5.5 percentage points. Wang said the potential for further growth in service consumption “remains immense in the foreseeable future”.

Wang said there are positive signs in exports and imports despite a challenging global trade environment. He said trade activities boomed during the Spring Festival, and that the recovery that started in September 2023 is expected to continue.

Lawrence Loh, director of Centre for Governance and Sustainability, NUS Business School, National University of Singapore, said China’s GDP target is “realistic”, and that the government’s plan to boost domestic consumption and develop emerging industries will serve as growth levers.

“These levers are well within the control of domestic economic policies and are thus achievable,” Loh said.

Loh predicted China will “go even stronger in opening up markets and investments for foreign participation”. He said external trade will augment internal measures to boost the Chinese economy toward the next phase of growth. 

“China is the global driver of (renewable) energy,” Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis, told China Daily. She noted that China leads the world in solar panel manufacturing and battery production.

Oh Ei Sun, a senior fellow at the Singapore Institute of International Affairs, said China has to do even better than the 5 percent GDP growth, as it is “the main engine for not only the region but the world”.

“Neighboring countries are all eagerly waiting for the spillover effect from China’s economic growth. To do that, China has to redouble its efforts in both stimulating domestic consumption and further encouraging entrepreneurship,” Oh said.

“The report on the work of the government clearly shows Beijing’s efforts to continue pursuing higher-quality economic growth and appropriately increase economic output,” said Dennis Munene, executive director of the China-Africa Center at the Africa Policy Institute.

“China’s economic achievement is good for the global community,” Munene said. 

Cavince Adhere, a Kenyan scholar of international relations with a focus on China-Africa relations, said with the right environment in place, and backed by responsive tools and policies, China’s fresh growth target of around 5 percent for this year will “certainly be achieved”.

Charles Onunaiju, director of the Centre for China Studies in Abuja, Nigeria, said that China again demonstrates that the structural foundations of its economy are stable and sufficiently resilient to withstand external shocks.

Xn Iraki, an associate professor in the University of Nairobi’s Faculty of Business and Management Sciences, said the focus on disruptive and frontier technologies would make China a leader in areas such as artificial intelligence, nanotechnology, space technology, quantum computing, and genetics.

Carlos Martinez, co-editor of the London-based platform Friends of Socialist China and author of The East is Still Red, said China’s GDP growth target signals confidence in continued economic rebound following the COVID-19 pandemic. 

It also reflects the “economic ‘new normal’, in which ultrafast growth based on quantity is giving way to high-quality, sustainable growth based on innovation”, he said.

Hugh Goodacre, a lecturer at University College London, said the Government Work Report is a milestone document on the path chosen by China in pursuing its own characteristic model of economic development. 

Christopher Bovis, a professor of international business law at the University of Hull in the United Kingdom, said China is ambitious in setting an economic growth target of around 5 percent, a figure which when compared with other economies is a “near game changer”. To facilitate this growth plan, the Chinese government has set a proactive fiscal policy, coupled with a prudent monetary policy.

Rhys Whalley, executive director of Manchester China Forum in England, said China’s economic growth target demonstrates the leadership’s ambition and its confidence.

George Koo, a retired international business adviser in Silicon Valley, California, noted that China has highlighted the development of “future industries” as a key part of its development plan for the next few years, and frontier technologies have to be an essential part of China’s future industries.

Sourabh Gupta, a senior fellow at the Washington-based Institute for China-America Studies, said 5 percent growth will be harder to achieve because the 2023 growth numbers were somewhat boosted by the lower base of the 2022 numbers.

“The economy will need to work hard to get to the 5 percent figure, considering the many headwinds that it is facing,” Gupta said, but added, “The government has the fiscal ammunition in store to attain its growth target.”

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Christopher Johnson, president and CEO of China Strategies Group, said the GDP goal was “a relatively ambitious target”.

“I think it’s ambitious and it’s going to be hard to reach, but it’s also probably the right policy,” Johnson, who is also a senior fellow at the Asia Society Policy Institute’s Center for China Analysis (CCA), said at a webinar hosted by the center.

Guonan Ma, a senior fellow on the Chinese economy at the CCA, said China’s economic strategy reflects a cautious approach.

“Beijing appears to have shunned ‘bazooka-style’ stimulus measures,” he said. Ma said what is new this year is that China intends to issue ultra-long special treasury bonds over each of the next several years, starting with 1 trillion yuan such bonds this year.

“Apparently, the aim is to leverage the still healthy central government balance sheet to assist the cash-strapped local governments,” Ma said.

He called it “a meaningful and practical step to address the local government debt challenges rather than simply kicking the can down the road”.

Gary Clyde Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics, said that 5 percent GDP growth “can be achieved with the right policies”.

On exports, Hufbauer said: “Unfortunately, there will be restrictions, especially in the US market but also in Europe. However, China can achieve high export growth in other markets (elsewhere) — in Asia, Latin America, and Africa.”

Wang Mingjie and Xing Yi in London and Chen Yingqun in Beijing contributed to this story.

Contact the writers at prime@chinadailyapac.com