© Reuters. FILE PHOTO: People shop ahead of the Chinese Lunar New Year at an outdoor market in Beijing, China January 13, 2023. REUTERS/Tingshu Wang
By Joe Cash and Ellen Zhang
BEIJING (Reuters) -China is confident of achieving its 2023 economic growth target as the economy picks up, the vice head of the state economic planner said on Monday, after its parliament set a modest growth target of around 5% for this year.
Domestic stock indexes opened subdued on Monday after the world’s second-biggest economy did not set itself a more ambitious growth target this year as it kicked off the annual session of its National People’s Congress.
China’s economy staged one of its weakest performances in decades last year, when gross domestic product (GDP) grew by just 3%, squeezed by stringent COVID-19 controls, a crisis in the property sector and a crackdown on private enterprise.
Thanks to changes in COVID prevention and control policies, the recovery in mobility for people and goods is speeding up, Zhao Chenxin, a deputy head of the National Development and Reform Commission (NDRC), told a news conference on Monday.
Tourism, catering and retail sales have improved significantly, fuelling the consumption sector since the Lunar New Year and getting the economy off to a strong start, he added.
“China’s economy is steadily improving,” Zhao said, adding they are “full of confidence” in achieving the 2023 economic growth target.
“The around 5% target is in line with current economic momentum… and it will help guide all parties to focus on improving the quality and efficiency of economic development.”
Meanwhile, the government will also “coordinate development and security and tackle risks related to property, finance and local government debt in an appropriate manner,” Zhao said.
Analysts noted economic and financial risks featured more prominently in this year’s work report, highlighting the government’s concerns over a slowing global economy, local government debt and persistent problems in the property sector.
“On the major tasks for the new year, the government work report spent an entire section emphasising effectively preventing and defusing major economic and financial risks, which was not specifically discussed in last year’s government work report,” Nomura analysts pointed out in a note.
Acknowledging that food and energy costs had increased in other markets and could do so in China as the country continues its exit from zero-COVID policies, Li Chunlin, another deputy head, reiterated China had enjoyed a good harvest and hog production capacity was abundant and energy security was strong.
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On 10 May, at a press conference held by the National Development and Reform Commission (NDRC), China’s top state-owned economic planner, the economic objectives set by the government for 2021-2023 were confirmed.
The NDRC made it clear that these objectives include an average annual growth rate of over 6%, and an increase in the per capita annual Gross Domestic Product (GDP) of around 5%.
According to a statement released by the Commission, the increase in the country’s total economic output is expected to reach a range of 6.8% to 7.5% over 2021-2023.
The NDRC also outlined key priorities for the next three years, most notably “continuous pursuit of high-quality growth” and “expanding effective investment”.
The Commission vowed to ensure that the government’s policy initiatives will significantly drive up productivity and create high-quality jobs for all.
It also said that efforts will be made to promote a more equitable, inclusive and sustainable society in which both urban and rural residents will share the benefits of economic growth.
The NDRC further stated that they are confident in achieving all their economic goals set out for 2021-2023. The Commission goes on to point out that the country is expected to maintain a steady flow of investment and a continued recovery in consumption.
The meeting concluded with the NDRC projecting a strong and stable outlook for China’s economy over the next three years.
In summary, the Chinese government is extremely confident that it will reach its 2023 economic growth target, driven by a number of reforms that are already underway.
