China remains resolute in its ambitious goal of achieving a 5 percent GDP growth this year, with officials expressing confidence in reaching the target through determined efforts.
Despite skepticism from some economists, top Chinese officials, including Zheng Shanjie from the National Development and Reform Commission, reiterated the feasibility of this goal during a press briefing at the National People’s Congress.
The leadership’s commitment comes amidst challenges and uncertainties threatening China’s economic recovery.
Defending the 5 percent target
Zheng Shanjie, Chairman of the National Development and Reform Commission, defended China’s 5 percent GDP growth target, describing it as an attainable “positive goal” during the National People’s Congress. He asserted that it is reachable with determined efforts.
The announcement was made as leaders addressed concerns and outlined plans to navigate economic headwinds. The target is aligned with China’s growth potential and is deemed achievable through concerted effort.
Economic landscape and challenges
While authorities acknowledge a strong start in the first quarter, they also recognize that achieving 5 percent economic growth won’t be without challenges. Zheng Shanjie highlighted hurdles such as deflationary risks, a downturn in the property market, and external pressures.
Despite the goal being set at 5 percent, many economists, including the International Monetary Fund, predict slightly lower GDP growth, citing uncertainties in China’s economic outlook.
Monetary policy and financial tools
Central Bank governor Pan Gongsheng noted that Beijing possesses a comprehensive monetary policy toolkit and assured that further measures are underway to address deflationary risks. The focus is on stabilizing price levels, promoting a mild rebound in prices, and ensuring the health of the banking sector’s balance sheet.
While market concerns persist, the central bank remains optimistic about supporting the ambitious GDP growth target through strategic monetary policies.
Diversification and economic drivers
China is pursuing various strategies to achieve its growth target. Officials emphasize the significance of large-scale trade-in programs for home appliances, replacement programs for used cars and outdated equipment, and the issuance of ultra-long-term special treasury bonds. The emphasis is also on boosting exports of electric vehicles, lithium-ion batteries, and solar panels to become the main economic drivers.
Long-term strategy and global market presence
Minister of Commerce Wang Wentao highlighted that promoting the replacement of old consumer goods with new ones is a powerful measure for economic growth and a long-term strategy for high-quality development. China’s policy tools, including interest rate cuts, reserve requirement ratio cuts, and tax reductions, are expected to continue supporting economic growth.
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