China aims for ambitious economic target by 2024

China Aims for 5% Economic Growth in 2022

By Peter Hoskins, Business reporter

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Premier Li Qiang Sets Growth Target

China has set an ambitious growth target of around 5% for this year, as it outlined a series of measures aimed at boosting its flagging economy. Premier Li Qiang made the announcement at the opening of the annual National People’s Congress (NPC) on Tuesday.

Challenges Faced by China

Mr Li acknowledged that China’s economic performance had faced “difficulties”, adding that many of these had “yet to be resolved”. It comes as China struggles to reinvigorate its once-booming economy. “Risks and potential dangers in real estate, local government debt, and small and medium financial institutions were acute in some areas,” he said.

Measures to Boost Economy

A series of other measures to help tackle the country’s slow recovery from the pandemic were also announced, including the development of new initiatives to tackle problems in the country’s crisis-hit property sector. Beijing also aims to add 12 million jobs in urban areas.

Focus on Technology and Defence

Regulation of financial markets will also be increased, said Premier Li, while research will be stepped up in new technologies, including artificial intelligence (AI) and life sciences. Along with measures to boost the economy, defence spending will be increased by 7.2% this year.

Economic Challenges Faced by China

For decades, the Chinese economy expanded at a stellar rate, with official figures putting its gross domestic product (GDP) growing at an average of close to 10% a year. However, some critics argue the real figure could be less than a third of that.

Property Market Crisis and Deflation

One of the most serious challenges are associated with the housing market, which according to the International Monetary Fund (IMF) accounts for around 20% of the economy. It is a major problem “not just for property developers but also the regional banks that are highly exposed to it,” Dan Wang, chief economist of Hang Seng Bank (China), said.

Geopolitical Challenges

China also faces a number of more far-reaching challenges, including slowing productivity growth and an aging population. Beijing’s relations with the US and many other major Western economies are further complicated by tensions over Taiwan and the ongoing trade dispute.

The Road Ahead for China

While China continues to address these challenges, its leaders are focused on restoring confidence and domestic demand. The country’s long-term plans remain uncertain, but one thing is clear – its more than 1.4 billion people are unlikely to enjoy a return to double-digit annual growth anytime soon.

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Read More of this Story at – 2024-03-05 04:37:47

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