The Chinese economy is widely expected to grow by more than 5% this year.
Vcg | Visual China Group | Getty Images
BEIJING — China has set a growth target of “about 5%” for 2023, according to Premier Li Keqiang’s work report published Sunday.
Analysts generally expected China to set a GDP target above 5% for 2023. According to CNBC’s analysis, the average growth forecast is 5.24%.
China also set a target of 3% for the consumer price index and a 5.5% unemployment rate for people living in cities – with the creation of about 12 million new urban jobs. That’s more than last year’s target of “more than 11 million.”
The work report called for a “prudent monetary policy” in a “targeted” manner. According to the report, the deficit relative to GDP is expected to increase from 2.8% last year to 3%.
Li presented the report Sunday at the opening of the National People’s Congress, part of the annual “Two Sessions” parliamentary meeting. This is his last congress as Prime Minister.
The work report noted the coming change in central government leadership and outlined eight economic policy priorities.
According to the report, boosting domestic demand – from consumption and investment – came first, followed by improving the industrial system and supporting non-state enterprises.
Other priorities included “intensifying efforts to attract and utilize foreign investment”, “preventing and defusing” financial risks, stabilizing grain production, continuing green development and developing social programs .
“We should strive to develop the digital economy, increase regular monitoring and support the development of the platform economy,” the report said in English.
While it didn’t name specific companies, Internet technology companies like Alibaba typically fall under the “platform economy,” which has come under increasing scrutiny from Beijing in recent years.
Property
On real estate, the work report called for supporting people to buy their first home and to “help solve the housing problems of new city dwellers and young people”.
“We must ensure effective risk prevention and mitigation among high-quality, leading real estate companies, help them improve debt-to-asset ratios and prevent unregulated expansion in the real estate market to promote stable development of the real estate sector,” the statement said. report said.
A slump in the mass real estate sector has weighed on China’s economic growth over the past year. Beijing cracked down on developers’ heavy reliance on debt for growth in 2020.
China’s real estate policy is likely to support the reasonable financing needs of quality real estate companies and lead them to areas of sustainable growth, said Bruce Pang, chief economist and head of research for Greater China at JLL.
On the other hand, developers “who cannot take the initiative to complete the adaptation and transformation of the company, of course, are approved by the market,” he said in Mandarin, translated by CNBC.
China’s GDP rose just 3% last year in a rare miss of the national target.
The country had set a goal of achieving growth of about 5.5% by 2022. But Covid controls, including Shanghai’s two-month lockdown, and the real estate crisis weighed on growth.
This year, the Two Sessions will also formalize government titles for the new prime minister, deputy prime ministers and heads of various ministries. This year’s National People’s Congress ends on March 13.
“Given the government’s complete reshuffle, it will be important to monitor in the coming months how the new leaders will boost private sector confidence,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management. “This, in my opinion, is more important than fiscal and monetary policy.”
