Despite a relatively upbeat assessment of China’s economic performance in 2023, the Chinese government is controlling expectations for 2024 by setting economic targets that are nearly identical to those for 2023. Pamir observes that Beijing continues to favor supply-side economic measures instead of those that aim to directly boost domestic demand.
Chinese premier gives optimistic assessment of 2023 economic performance
At the March annual meeting of the National People’s Congress (NPC), China’s rubber-stamp parliament, Premier LI Qiang reported that China has successfully achieved economic recovery and growth in 2023, citing the following figures:
- GDP grew 5.2%.
- 44 million jobs were created.
- Urban unemployment rate stood at 5.2%.
- CPI grew 0.2%.
- Per capita income increased 6.1%.
- Urbanization reached 66.2%.
Li’s government work report added that in 2023, the foundation of China’s economic security has improved, highlighted by the following achievements:
- Grain output was 695 billion kilograms, which is a historical record.
- Energy supply sources were secured.
- Self-reliance in China’s supply chain was elevated.
- Risks in key economic and financial sectors were reduced.
Meanwhile, China has continued the policy of reform and opening by completing the organizational restructuring of the central government, making progress in reforming state-owned enterprises, introducing new policies to encourage development in the private economy, adding and improving free-trade zones, introducing new foreign investment policies, and taking other measures.
Li’s report indicated that in 2023, traditional manufacturing industries have been upgraded through automation, digitalization, pollution reduction, and other measures. Modern service industries, such as hospitality, entertainment, and senior care industries, have also assumed a greater economic role. In addition, strategic emerging industries have made significant progress, with a particular focus on renewable energy and electric vehicles (EV).
- Renewable energy has surpassed fossil fuel energy in terms of power generation capacity for the first time in history.
- China accounted for more than 60% of global EV output and sales.
Li declared that in 2023 China has achieved technological breakthroughs, notably with respect to aviation engines, ship turbine power plants, fourth-generation nuclear power, AI, and quantum computing.
Li’s report did not address economic problems and setbacks such as the real estate market collapse and local government debt; however, he mentioned that China is still facing difficulties and challenges, including external ones such as a weak global economy, frequent regional conflicts, and “disrupted” international economic engagements.
- Li stated that “the complexity, seriousness, and uncertainty of China’s external environment are intensifying.” Li also highlighted various structural problems, including insufficient demand, which continue to hinder China’s economic recovery.
Beijing controls expectations for 2024 and continues to favor supply-side measures
Despite a somewhat upbeat assessment of China’s economic performance in 2023, the Chinese government is controlling expectations for 2024 by setting economic targets that are nearly identical to those for 2023:
- GDP growth of around 5%.
- Unemployment rate of approximately 5.5%.
- CPI increase of approximately 3%.
- Grain output of approximately 650 billion kilograms.
Although Li’s report cited insufficient demand as an impediment to China’s economic recovery in 2023, he indicated that in 2024 the Chinese government, in an effort to boost the Chinese economy, would continue to emphasize supply-side measures, including the following:
- Take greater steps to advance structural transformation to Chinese industries.
- Give greater emphasis to developing science, technology, and education.
- Balance development with security risk management.
- Boost agricultural production and promote comprehensive rural development.
- Promote urban and rural integration and coordinated development among regions.
- Continue to push for environmental protection and green, low-carbon development.
- Improve public services.
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