China’s top leaders have set an ambitious growth target of around 5 percent for its struggling economy, which is facing challenges in the housing market, consumer sentiment, and investor confidence. Premier Li Qiang, the country’s second-highest official, announced this goal during the annual session of the legislature, maintaining the same target as the previous year despite uncertainties about the accuracy of China’s growth figures.
Some economists have raised doubts about China’s reported growth, particularly as last year saw a modest rebound due to strict COVID-19 measures that were in place until December 2022. Achieving similar growth this year without that boost may prove to be more challenging. Consumers and investors remain cautious about the economy’s recovery, with stock markets experiencing significant fluctuations and uncertainty. Despite these challenges, Mr. Li expressed confidence that China is on the right path to economic recovery.
The National People’s Congress, a key Communist Party controlled body, is focused on the government’s economic objectives and strategies to achieve them. China is under intense international scrutiny as it aims to restore confidence in its long-term prospects and embrace new sources of growth, such as clean energy and technology. However, the housing sector poses a significant obstacle, with issues like excess inventory, debt-laden property companies, and declining real estate values. To reach the growth target, China may need to rely on substantial state spending and coordinated policy support, according to economists at HSBC.
