China's 5% growth target for 2024 is achievable, state planner says

China's 2024 growth target of around 5 per cent is in line with the country's economic potential, the head of the state economic planner said on Wednesday while announcing plans to step up policy adjustments and issue special treasury bonds. Speaking at a rare joint briefing on the sidelines of the annual parliament meeting in Beijing with China's finance minister, commerce minister, central bank chief and head of the securities regulator, Zheng Shanjie said he expected the world's second-largest economy to have a good first quarter.

"The target is in line with the annual requirements of the Fourteenth Five-Year Plan and matches the potential for economic growth, making it a positive and achievable target," said Zheng, chair of the National Development and Reform Commission (NDRC). On Tuesday, Premier Li Qiang in his maiden work report to the National People's Congress announced this year's growth target would be around 5 per cent, which many analysts said was ambitious unless the government rolls out much more stimulus. "Comprehensive analysis shows that the economy can be expected to have a good first quarter," Zheng said, referring to February manufacturing and services sector data.

Zheng also said that China's exports for the January-February period increased by 10 per cent, but did not state whether that was in yuan or U.S. dollar terms. Economists recently polled by Reuters expected outbound shipments in the first two months grew just 1.9 per cent year-on-year, slowing from December. China's central bank governor said the bank would keep the yuan basically stable and that it had "rich monetary policy tools at its disposal."

Pan Gongsheng, governor of the People's Bank of China (PBOC), added there was still room for cutting bank's reserve ratio requirement, following a 50-basis points cut in January, which was the biggest in two years. China's disappointing post-COVID recovery has cast doubts about the foundations of its economic model, raising the stakes for government action at the week-long parliament meeting of senior policymakers.

The economy has been grappling with sub-par growth over the past year amid a deep property crisis and as wary consumers hold off spending, foreign firms divest, manufacturers struggle for buyers, and local governments contend with huge debt burdens. China's manufacturing activity in February shrank for a fifth straight month, an official survey showed on Friday, though the services sector showed modest signs of improvement.