China has set its target for GDP growth at 5%, in line with analysts’ expectations for another year of modest ambitions for the economy, amid regional tensions and its demographic crisis.
China’s premier, Li Qiang, spoke of the “challenges” facing China’s leaders as he delivered his annual government work report on Tuesday. He cited the global economy and regional tensions as hurdles for China’s recovery, as well as domestic issues such as low consumer demand in a challenging labour market.
Li was speaking at the opening session of the National People’s Congress, China’s annual parliamentary gathering.
The 5% target is in line with 2023’s goal, which was notably restrained as China emerged from three years of strict zero-Covid measures which battered the economy.
But with the pandemic in the rear-view mirror, there are signs that some of China’s economy challenges may be structural, such as the ageing population and shrinking pool of workers. Official data released in January revealed that China’s working-age population accounted for 61% of the economy, down from 68% in 2013.
According to official statistics, China’s GDP grew by 5.2% in 2023. But independent economists estimate that the actual growth rate was lower, with analysts at Rhodium putting it at 1.5%.
Other targets announced by Li on Tuesday include the creation of 12m new urban jobs and increasing consumer prices by about 3%. China’s consumer price index fell by 0.8% in January, the fourth straight month of decline.
Li said the targets would “not be easy” but that “high quality development” remained the priority.
Li was speaking at this year’s Two Sessions, the concurrent meetings of China’s parliament and top consultative body. In a break with precedent, Li will not be answering questions directly from the press this year.
