Several Chinese provinces, including the economic powerhouse Shanghai, have set modest economic growth targets for 2024 after missing their targets last year, a sign that a nationwide recovery to pre-pandemic levels in the world’s second-largest economy is again unlikely this year.
China's economy is forecast to have difficulty recovering to pre-COVID-19 pandemic levels in 2024. (Illustration photo: CNN)
China's gross domestic product (GDP) grew 5.2% last year, meeting the government's growth target of around 5%, according to Reuters . However, at the local economic level, at least 15 of the country's 31 provinces and cities will miss their 2023 targets.
Heilongjiang province in northeastern China, despite booming trade ties with Russia, reported just 2.6% growth, falling short of its target of around 6%.
Jiangxi province achieved growth of 4.1 percent compared with a target of around 7 percent, while Henan province missed its target by 1.9 percentage points.
Even Shanghai, China's top economic city that is expected to recover well from a strict COVID-19 lockdown in 2022, will miss its growth target in 2023.
Experts predict China will set a similar growth target of around 5% for 2024, as a prolonged property downturn, weak private investment and falling domestic consumption are expected to continue to hold back the world's second-largest economy.
Before the COVID-19 outbreak, China's GDP had been growing at least 6% annually for a decade.
However, experts say China's economy may struggle to hit the 5% target even with additional stimulus measures due to weak demand and a property crisis. In the past, some have suggested scrapping the GDP target to allow for more flexibility in policymaking.
According to official reports, as of noon on January 26, of the 27 provinces, regions and cities that have announced GDP targets for 2024, only 5 of them set higher growth targets than in 2023.
Among them, Guangdong, one of China's major economic powerhouses, is targeting 5% growth in 2024, while wealthy Jiangsu province is aiming for more than 5%.
China's capital Beijing has also set a higher growth target this year, of around 5%, while Zhejiang, another wealthy province, is also aiming higher than last year, of around 5.5%.
Among the localities that have lowered their economic growth targets, 12 are being identified as areas with a "high risk of default", including major provinces such as Liaoning and Jilin on the border with North Korea, Guizhou and Yunnan in the southwest, three autonomous regions and the municipalities of Tianjin and Chongqing.
"Given the frequent misses of growth targets, local governments' 2024 growth targets are more modest and realistic. Especially the 12 provincial-level economies that are burdened with local debt, most of them have lowered their growth targets," said economist Wang Jun of Huatai Asset Management.
China has directed heavily indebted local governments to delay or halt some state-funded infrastructure projects, in an effort to limit the risk of debt defaults even as it tries to stimulate the economy.
Hoa Vu (Source: Reuters)
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