Xi Jinping's China Sets Ambitious 2024 Growth Target Of 5%, Vows To 'Transform' Economy

In a bid to revamp its economic model, China has announced an ambitious growth target for 2024. This announcement was made by Chinese Premier Li Qiang during the annual meeting of the National People’s Congress, the country’s parliament.

What Happened: Li’s target for 2024 is a GDP growth of around 5%, which is the same as the previous year. This goal, although challenging due to the waning post-COVID recovery, indicates China’s emphasis on growth over reforms. Li also pledged to implement new policies to address the nation’s structural imbalances, Reuters reported.

China’s economy showed uneven growth last year, exposing deep structural imbalances. This led to calls for a new growth model. The start of 2024 was marked by a stock market crash and deflation, intensifying pressure on China’s leaders to devise new economic strategies.

“It's more difficult to achieve 5% this year than last year because the base number has become higher, indicating that the top leaders are committed to supporting economic growth,” said Tao Chuan, chief macro analyst at Soochow Securities.

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Despite the lack of a specific timeline or details, Li emphasized the need for stability as the foundation for all actions. He acknowledged that reaching the 5% target would be challenging and called for a “proactive” fiscal stance and “prudent” monetary policy.

“We should not lose sight of worst-case scenarios. We must push ahead with transforming the growth model, making structural adjustments, improving quality, and enhancing performance,” Li said in the Great Hall of the People in Tiananmen Square.

Why It Matters: China’s economic stability has been a topic of concern, with some experts drawing parallels to Japan’s lost decades since the 1990s.

The announcement of the growth target comes after a series of economic challenges for China. The country’s stock market suffered a significant downturn, prompting the government to take emergency measures to stabilize it. However, these measures were met with skepticism from investors, who doubted the effectiveness of President Xi Jinping‘s strategies.

Despite these challenges, China has been projected to overtake the US as the top economy by 2037, with strong growth also forecasted for other countries, particularly India.

Despite these challenges, China has been projecting confidence in its economy. At the World Economic Forum meeting in Davos, Li Qiang emphasized that the Chinese economy is equipped to manage fluctuations in its performance and that the general trajectory of its long-term growth remains unaltered.

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